Even though public liability insurance is not obligatory in Australia, most business owners buy the coverage to indemnify them from third-party injury and property damage claims. Below is a guide on the considerations you should make when buying public liability insurance.
An experienced insurance broker will help you calculate the amount of cover you require. Typically, you will need more coverage if you run a risky business or if your business interacts with many people. For example, construction work exposes customers and other third parties to accidents such as falls or injuries caused by faulty equipment. As such, a contractor would require more coverage compared to a lawyer that runs a private practice. Most companies will customise the cover to suit your business. For example, a trucking company may require a different cover from a supermarket. People providing online services may not require public liability insurance since they do not physically interact with customers.
Small business owners may not have instant cash to pay annual premiums. As such, they should find an insurance company with flexible payment plans. For instance, some companies will allow you to make monthly payments, while others will divide the annual premiums into three or four payments.
Check the exceptions on the insurance cover. Some of your concerns should include the following:
What is covered? Public liability does not cover your employees and personal property. However, the insurance company will compensate injured third parties and cover your legal fees.
What is the limit on the insurance cover? For instance, some companies may not provide coverage outside your home country.
Some insurance companies will customise the insurance policy to general liability insurance that covers professional negligence and personal property.
If the policy has a liquor liability clause, you will not receive compensation if damages occurred due to drunken behaviour.
Updating The Cover
Remember to update your cover to suit changing business conditions. For example, you may need additional coverage if you open a new office. Observing safety is a sure way to reduce annual premiums. For instance, you could erect safety triangles and warning signs to inform customers of slippery surfaces, defective equipment or ongoing construction works. Ask for a fire inspection to ensure your business premises meet the required fire safety standards. The business premises should have emergency exits and fire extinguishers.
Conduct some background research when taking the insurance cover. Check the reputation of the various insurance companies and the terms of each insurance cover. As a rule of thumb, you should work with financially stable insurance companies that have a friendly claims process.