Many businesses fail to understand the importance of having public liability insurance. Without cover, businesses can face paying exorbitant penalties for any damages they may cause to their clients and customers if they are not adequately protected. Quite often, businesses may have a public liability policy that may not necessary cover them for the specific risks they face within their industry or business activities.
Public liability insurance is easily the most common form of insurance taken by small to medium sized enterprises, as well as large businesses.
For new business owners, public liability insurance could be a confusing concept. Before taking out this insurance, it is important to determine the amount of coverage you need to protect your business in the public sphere.
Why do you need it?
While it is not obligatory for all businesses to have public liability insurance, it should be considered necessary if you have any kind of public interaction involved in your business- from clients visiting your workplace to customers receiving the deliveries. Even home based businesses should consider having this policy if their home office is used as a meeting place.
Public liability insurance covers an array of situations however, in general, this insurance policy provides cover for your business if someone is injured due to the activities of your business. Incidences where your business activities cause damage to a third party may also be covered. Remember, that even minor damage to the personal property of a client can lead to heavy fines and you will be required to pay the legal fees if the case proceeds to court. With an appropriate public liability insurance policy, all such expenses are covered.
You should consider having this insurance policy if:
1. You are the owner of a business premises where employees, customers, clients or the general public frequently visit.
2. Your business is involved in organizing off-site events or activities that are attended by the general public.
3. You have a home based business and individuals come to your home for business purposes.
Who is covered?
A public insurance policy should cover:
1.Your business, including its subsidiaries.
2.Your employees, including any directors and partners, while they are acting within the scope of the duties assigned to them.
How much cover do you need?
The amount of coverage that a company requires depends largely on the risk it undertakes on regular basis. The risks will depend on the minimum standards set by your industry and the requirements specified by your client. Before deciding on the cover you should purchase, it is best to check out both of these factors. If you are working on a local authority or government contract, you will generally need to have a minimum amount of cover written in the contract.
What is product liability?
In case your business is manufacturing or selling products, you are accountable for the quality of these products as well as any problems that may arise after they are sold. Essentially, you might be legally accountable for any harm these products cause to your customers.
Even though you haven’t produced a defective product, you might still be held accountable if you were involved in selling the product. You may also be responsible if your business name is involved with the product or if your business has repaired or modified the product.
It is foolish to assume that you are protected without public liability insurance just because you operate a small company, or because you may not manufacture products or have a shop front with employees. Things as small as a coffee spill on the client’s property may cost you thousands in the event you are not insured. It is therefore imperative that any business thoroughly researches the risks their business faces on a daily basis and speaks to an insurance professional to ensure you have the correct level of cover to meet your requirements.
