Guide to Public Liability Insurance for Sole Traders

When you own a business, accidents happen. Being prepared for those accidents is essential to keep your business running long-term. That is why Public Liability is a crucial insurance coverage option, to financially protect businesses from unintentional harm done to others or their property.

What is Public Liability Insurance and Why is it Important?

Public Liability insurance protects you from any financial damages resulting from accidents or incidences caused by your business. These accidents or incidents can happen to anything or anyone, person or property. It can cover things like death or serious injury, emotional distress, property damage such as causing a fire, or consequential damage like loss in revenue or reputation for another business. 

Public Liability insurance for sole traders is important because oftentimes it means an individual and their business is a single entity, meaning if things go wrong within the business, an individual's personal finances can be affected. Public Liability insurance is not a legal requirement in Australia, however some industries do require it in order to work with clients. Public Liability is considered arguably the most important insurance coverage for sole traders, over any other self-employed business type. 

Understanding the Risks

Sole traders face a wide range of risks when they enter into a new business venture, this includes; 

  • Property damage

Property damage can mean accidental damage during a service delivery, such as a tradesperson causing damage to someone's property. Or it could mean product liability from supplying a faulty or defective item that causes damage.

  • Bodily injury

These kinds of accidents can happen on premises where visitors can come into the workplace, such as clients or delivery drivers, and they can get injured by hazards or accidents like tripping or items falling on them. Alternatively, if services provided include physical interaction, like massages, then liability for injuries sustained by clients becomes an issue as well.

  • Professional Security 

If a business releases advertisements or content that claims a competitor has been found lacking in some or all of their products, and the competitor sues for slander, this is part of what Public Liability covers. It also provides coverage for things including but not limited to infringement of copyright, false advertising, or stolen ideas. 

All of these reasons factor into why you, as a sole trader, should seriously consider including Public Liability in your insurance plans.

What are the Benefits of Public Liability Insurance?

Considering the risks above, below is a list of benefits to having Public Liability as part of your insurance coverage.

Personal Assets are Protected

As a sole trader, you are personally responsible for any financial issues incurred by your business. Public Liability insurance is an incredible asset that ensures your safety from potentially overwhelming legal costs, settlements, and judgements that can come from lawsuits surrounding advertising injuries, personal injury sustained on the premises, or property damage. 

Boosted Business Reputation

Without good insurance cover, claims of professional negligence can have a serious impact on your business's public image and reputation. When it comes to running a business, your brand reputation is invaluable. Public Liability insurance protects your public image and reputation, boosting trust for both business partners and customers, and assures partners and customers that you are a professional and responsible business. 

Fulfils Industry Requirements

Depending on the industry, some sole traders must have Public Liability insurance in order to work with clients. This is especially true with construction, with many contracts in the building industry requiring contractors to have Public Liability insurance. Similar with leased premises such as workshops and storefronts, Public Liability insurance could be a requirement for the lease. Public Liability insurance is compulsory for most trade licences, most construction and building contracts, leased premises, using subcontractors, and for some business insurance packages. 

What is Not Included in your Public Liability Insurance

While this insurance can protect you from a wide range of circumstances, there are some that it cannot, such as;

  • Deliberate acts
  • Product recall costs
  • Injuries to your employees
  • Professional advice
  • Aircraft products
  • Asbestos liability
  • Pollution liability
  • Contractual liability

It is always a good idea to have an in depth discussion with your insurance broker to fully understand the specifics of your insurance policies so you know what is and is not covered. This is why we recommend using Morgan Insurance as your chosen Public Liability insurance broker. 

Why you Need an Insurance Broker

You can sleep soundly knowing your business is properly protected from all kinds of situations. Public Liability insurance is so important for all the reasons provided above. By understanding the potential risks, you can take into account your businesses specific needs when deciding what insurance coverage to invest in. 

Insurance brokers are excellent at providing comprehensive insurance coverage options that benefit you as a business owner rather than going directly to an insurance company that will look out for themselves. Brokers can negotiate with insurers to get you the best possible deal for your Public Liability insurance, and ensure a smooth claims process in the event that a claim needs to be lodged. They also provide ongoing support and advice, monitoring your insurance policies as your business needs change. By using an insurance broker, you save time, effort, and stress knowing your insurance needs will be handled for you by professionals. 

How Morgan Insurance Brokers Can Help You

When you work with Morgan Insurance Brokers, we offer comprehensive insurance advice to a wide range of business types. Whether you are just starting up a new business, or if you are an established business looking for a new insurance broker, we are a reliable and reputable team of Public Liability brokers who are keen to find the right insurance policy for you. Contact Morgan Insurance Brokers today for an obligation-free consultation and our team can tailor-make the perfect insurance policy for you!

by Mojo Dojo