Does your business provide products or services to customers that come in and out of your establishment? If "yes", then the answer to the next question is a very important one. That question is: Do you have public and products liability insurance? If you answered “no,” then you may need to learn more about what it is and what it can do for you and your business.
What it covers
Public and products liability insurance provides cover in respect of a business’s liability in the event of a loss or damage caused as a result of negligence in connection with the business’s product or service sold or supplied. This includes damages that may be awarded to a customer or a third party who has walked into your establishment and become injured or harmed in any way. Any related legal fees, hospital treatment, and other expenses that may be claimed.
Insurance policies are legal contracts with the terms, conditions and exclusions being the basis of the cover provided by the insurance company. It is important that you understand your policy coverage. Cover varies from policy to policy, some differences may be minor and others may be too restrictive and not provide adequate protection. If you do not understand your policy, contact your insurance broker and ask them to run through the policy with you to ensure that you have the right protection and that you fully understand what is and what isnt covered.
As for the cost, it depends on what kind of business you’re running. A person operating a real estate agency does not need the same kind of insurance that someone operating a hardware store does. The hardware store is going to have more public and product liability exposure than the real estate agency. Many times, the real estate agent meets with the client out of the office, so they do not have as big an exposure as the hardware store that also sells saws, hammers, nails, and drills.
Having liability insurance is a good business protection; it only takes one incident to have a lawsuit on your hands. That is certainly something you do not have to deal with without insurance protection. The accident itself is stressful enough, let alone having to defend yourself in court and be out of pocket the legal costs. Just because you may have one or two people a week walk into your establishment doesn’t mean you shouldn’t have liability insurance. The point is that the public is walking into your place of business and you need to insure yourself against anything that could occur to those one or two people.
The dos and don’ts
There are some dos and don’ts that you have to know when looking for liability insurance:
- Do use an Insurance Brokers – they will find the right product suitable for your needs following an analysis of your business risks. Where as insurance companies offer their insurance products and don’t provide advice on the appropriateness of their products for your needs.
- Do provide full details of your business activities including previous insurance history to your insurance broker/company to ensure that the quotation provided is adequate. Non-disclosure of information can void an insurance contract.
- Don’t rush purchasing insurance. Allow ample time to facilitate your insurance. Quotes can take weeks for insurance companies to provide depending on the nature of your business.
- Don’t purchase a policy purely on price. Make sure you understand your policy and what you are and aren't covered for before you accept the quotation.
The dos and don'ts have a lot to do with common sense. If you don’t understand insurance, seek advice from an industry professional and understand what you are purchasing.
Protect yourself and your business in case of the personal injury or property damage related matters. The heartache will be much less in case an accident does occur. At least you know that, with liability insurance, you'll be able to go on with your business after the case is settled.
Disclaimer – “This material contains general information only and may not suit your particular circumstances. To decide if a policy is right for you please carefully read the relevant Product Disclosure Statement (PDS) and/or Policy wording. While we have exercised due care and skill in preparing this information, Optimum Insurance Services (Optimum) does not accept any legal responsibility or liability for negligence or otherwise to you or anyone else who seeks to rely on this information. This includes, without limitation, loss arising from a possible failure of the information to comply with statutory or regulatory requirements or the failure of the information to identify other terms and conditions beyond those considered in this document. You should obtain advice to ensure that your policy provides adequate cover for your circumstances.
“Optimum Insurance Services Pty Ltd is a Corporate Authorised Representative of Insurance Advisernet Australia Pty Ltd (Car No. 291220), Australian Financial Services Licence No 240549, ABN 15 003 886 687.”