For today’s businesses, public liability is a big deal. And that big deal can occur over little things. For example, the minor oversight of leaving a drain partially uncovered in a car park cost one pub over $450,000 in a liability settlement. It is little wonder the Australian government strongly recommends most businesses have public liability insurance, and that many follow this advice.
Public Liability Insurance
Public liability insurance protects your business against claims of damage or injury to a third party. From a supplier hurting an ankle tripping over a loose power cord in your office or a customer getting food poisoning from rotten eggs at your café, the ways in which people interacting with your business can be injured is limitless.
Personal injury is often the “popular face” of public liability, but it’s only one aspect of it. If a third party’s property is damaged through your business, like a customer’s mobile phone splashed with water while on your premises, it is also a public liability situation.
Public liability insurance covers more than just potential settlements for such claims. It may also cover the costs of the legal proceedings around that claim, or even expenses from first aid that arise from the time of the accident.
But there are some limitations to public liability insurance:
Employees
Third parties, such as customers, suppliers or anyone the business has face-to-face dealings with, can make public liability claims should they or their property be injured or damaged in dealing with the business. Public liability insurance protects the business financially when a claim is made.
What public liability insurance doesn’t cover is injury to workers inside the business. This includes all full-time, part-time or casual employees.
Volunteers
Volunteers are another category of worker where the rules aren’t always straight-forward. Although public liability insurance should cover volunteers that work for the business, the extent of the coverage may vary. If your business utilises volunteers, you should consult with your insurance broker to check how well-protected the volunteers are.
Like employees, public liability insurance doesn’t protect the volunteers from harm while performing their duties. In some cases, they are also not covered by workers compensation insurance, but require some form of volunteer personal accident insurance to protect against harmful eventualities.
Contractors
Sub-contractors are an exception to the employee rules around public liability and workers compensation. While they may be working for you in some capacity, they are not an employee of the business and if they require to be covered by the business’ public liability insurance, need to be specifically added to the policy. Many sub-contractors have their own public liability insurance, so it’s advisable to confirm with them before they begin work that they hold such insurance.
It’s also important to keep in mind that as sub-contractors are not employees of the business, they are third parties. This means it’s possible for them to make a public liability claim against the business itself should something happen to the sub-contractor.
Public liability insurance is one of the “must-have” insurances for most businesses in Australia. But in holding this insurance, it’s important to note its limitations with employees, sub-contractors and volunteers, all of which require other forms of insurance protection.
PSC Insurance organises public liability and employee-based insurances for thousands of businesses around Australia. Speak to us now to see how we can do the same for yours.
Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.
