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Public Liability Insurance
“A guide on how to assess your company’s public liability risk.”
You’ve insured your company against theft, fire, and natural disasters. You’ve protected your business against financial losses and industry-specific risks. Have you assessed your company’s need for public liability insurance cover?
What is Public Liability Insurance?
Public liability insurance covers the legal and compensatory expenses arising from a situation where a third party is injured or their property is damaged while they are at your place of business. Sometimes this includes your office or warehouse, and sometimes it includes your staff working in their home or another venue.
How much Public Liability Cover does my company need?
Your company may have established quality and safety measures in place to lower the chances that injuries or damages occur, but this does not mean it is not at risk for public liability claims. Third-party accidents could occur even in the most carefully run operations. How can a business owner assess their company’s public liability risk to determine how much cover they need?
It’s not as simple as throwing a price out there. The fact of the matter is that third party legal and compensatory costs can have costly financial implications for your company should a situation arise. To determine your company’s risk for public liability, start with what you as the business owner or as a managing member know.
A business owner or manager knows their company inside-out and will be the most knowledgeable person regarding possible risks and likely or unlikely situations that could occur. When you get a Business Insurance Quote, you can ensure this information guides the Public Liability Cover you get from your insurance provider. Your knowledge combined with their experience can help guide you to the best balance of public and other liability cover for your unique situation.
What to Consider When Assessing Your Company’s Public Liability Risk
Figuring out how much to cover your property and assets for is much easier than working out how much public liability cover to get. If a computer in your offices breaks, insuring it for its value is simple and the computer can then be easily replaced. When looking at possible third party damages or injuries, however, many factors come into play that can vary the possible costs greatly.
When you’re thinking about possible situations in which third parties can get injured or damage to their property can occur, think about the nature of possible injuries. For example, a box or ladder falling onto someone. The costs can be very different if, for example, an animal goes rogue.
Think about the kinds of third parties that come into contact with your company, what types of injuries could occur, and the consequences of such an injury. In some cases, a person suffers more than just physical injury and may lose their ability to produce income. Of course, there are usually medical charges and other damage costs to take into account too.
Next, think about any damages that could occur to the above-mentioned third parties and what the possible values for these damages would be. For example, if your electrician should step through a ceiling board in your client’s office building, or incorrect wiring blows the fuse for the whole operation. There are the physical damages to the property to consider, and then the loss of income while the wiring is repaired.
As you can see, there is no way to be 100% sure that your cover is enough, but your business insurance provider will be able to help you navigate the risks.
What should my business public liability insurance cover include?
Not all public liability insurance cover is alike. Before you sign, look into what is and isn’t being covered. Your public liability insurance should include legal fees for the insured and the third party involved and settlement amounts.
Your company can be held liable for the actions of its employees and staff, its directors, and anyone in its employ or representing the business. Further liability insurance can include cover for these kinds of situations to broaden the scope of your protection against these kinds of liabilities. Speak to your legal team or your insurance provider to go through the finer details of your public liability policy. In this way, you can make sure every possible situation is covered as far as possible for the budget you have.
Here are a few situations to consider when assessing your company’s public liability risk.
- You may need cover for situations where members of the public or people who are not employed by your company enter your premises and get injured. They can slip on a wet floor or trip on a stair in a badly lit stairway.
- Your employees install air conditioners, geysers, or products involved in the service you offer them at your customer’s premises defectively, causing damage or harm.
- Animals on your property can cause injury or damage (horses, for example, or cattle). Imagine a situation where a wild animal escapes an enclosure due to staff negligence and causes injury or damage to a third party or their property.
Other liabilities that are not covered by Public Liability Insurance should also be considered and included in your risk management.
- Defective products or cutting corners in your production of a product can result in damages or injury, sometimes even death. Cover can include legal costs and repair costs.
- Sometimes, if your business is in a particular industry additional specialised cover may be necessary for specific eventualities that can have huge financial consequences. In these cases, a specialised liability underwriter needs to be involved in further liability insurance cover.
Assessing your company’s public liability risk begins with knowing your business. Understanding its operation and the details of applicable health and safety issues in your workplace is a must. Sometimes, speaking to HR or other relevant management can fill in the gaps in your knowledge.
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Sources: Business Media Mags