Public Liability Insurance: A Guide for Business Owners

As a business owner, director or manager, you do everything you can to avoid accidents at work.But despite your best efforts and intentions, calamities can – and do – still happen. The cost to make amends is often in the tens of thousands of dollars. That’s why you need public liability insurance.This guide looks into why every business owner in Perth needs public liability insurance and outlines how to get the best public liability insurance quote in the market.

First things first: What is public liability insurance?

Public liability insurance covers your business against claims arising from injury, death or property damage caused by you, your employees or your work.Any time your work involves interacting with people outside your company (that’s most Australian businesses), there is a risk of injury or property damage. If a representative from your company is accused of negligence causing injury, death or damage, the financial repercussions are serious:

• Medical costs for the injured person
• Rehabilitation costs
• Paying to repair the damage
• Legal fees to defend your position
• Damages awarded to the victim
• Investigation fees
• Paying fines and penalties

Public liability insurance prevents the company’s management, employees, contractors and infrastructure from wearing the cost of a claim. When the risks extend to your product, you may need a public and product liability insurance policy.With the right cover, your business can avoid the high costs of third-party damage or injury claims while the victim still receives the necessary reparations.

What is covered under public liability insurance?

In general, public liability cover will reduce your business’ financial risk for:

• Third-party injury: Medical bills and rehabilitation costs when your work, equipment or actions accidentally cause a bodily injury.

• Property damage: Repairing or replacing the damaged property.

• Legal costs: Your legal fees and the victim’s legal fees if their claim succeeds, plus any settlements.

• Awarded damages: The Court may grant the victim damages in addition to the legal fees and direct costs.

• Investigation costs: Some incidents require government agencies or professional bodies to investigate, which you must pay for.

• Injuries arising from advertising: If accidental false advertising leads to injury or death, your business could be held liable.

It’s important to note that public liability insurance only applies to accidents and negligence cases. That means where a representative from your company failed to take reasonable care, resulting in property damage, injury or death.Public liability will not cover you in case of deliberate action. It also excludes costs related to damage to your product or property and employee claims.Other types of insurance apply in those cases:

• Worker’s compensation insurance covers employee claims
• Plant and equipment insurance covers your tools, property and equipment
• Commercial motor vehicle insurance covers your work vehicle
• Business insurance covers unexpected events that cause property damage and economic loss

If you are unsure what cover you need, speak to the insurance experts at Connect Business Insurance for tailored advice.

Is public liability insurance legally required?

Here in Perth, public liability insurance is not a legal requirement, unlike worker’s compensation insurance.However, many professions find it a requirement imposed by clients, contractors and partner businesses.For example, a vendor at a community event (food truck, AV hire or bar team) will almost certainly need to prove they are covered by public liability insurance. Contractors, consultants and specialist service providers might also need public liability insurance before they can work on third-party premises.

Good to know: Public liability payments average more than $33,400

The last available APRA data from 2019 shows Australian insurers paid out more than $1.05 billion for 31,539 public and property liability claims.On average, each successful claim costs $33,419.Unless your business has an enormous slush fund to pay settlements, legal fees and direct costs, public liability insurance is a smart move.

How to find the best public liability insurance in Perth

Policy inclusions

Every public liability insurance policy is unique to the insured business.While some insurers will offer all-encompassing policies, this might not be the most cost-effective option for your business. The same goes for cookie-cutter cover.Make sure you work with an insurer who takes the time to understand your unique needs and arrange a tailored, affordable insurance policy.

Cover limits

Although the average insurance payout is a little less than $35,000, public liability claims often exceed $100,000.Your insurance policy should cover your business in the event of a high claim. However, high cover limits do not always mean high premiums.Generally, most public liability insurance policies for small businesses in Perth offer cover up to $20 million. If your insurer has a lower limit, get a quote from Connect Business Insurance for the right cover at a competitive rate.

Exclusions

Public liability insurance does not eliminate all your financial risks. There are some general exclusions:

• Illegal or deliberate actions
• Faulty or substandard work
• Injury to you or your employees
• Asbestos claims
• Damage to your vehicles and property (or your employees’)
• Contract breaches
• Professional duty breaches
• Slander

Your insurer may exclude other events or situations. Always read the fine print before committing to an insurance policy.

Perth public liability insurance experts

Public liability insurance requirements differ in every Australian state and territory. For example, some South Australian and Tasmanian businesses are legally required to carry public liability cover.Working with a local, experienced team is the only way to ensure your public liability insurance policy provides the appropriate cover for your industry and risk profile.

Tailored policies

The cost and requirements of insurance policies vary depending on your unique risk profile. If your business insurance policy is outdated or not tailored to your business, you could be exposed to significant financial risk. Or you could be paying too much for inadequate insurance.Connect Business Insurance tailors our policies to minimise your financial risk and provide maximal cover in case of an accident.Use our online form to request a quote on comprehensive insurance, including the leading public liability insurance in Perth.