Inclusions and Exclusions of Public Liability Cover

Public liability insurance is essential for many businesses across Australia, regardless of size or industry. That’s because it protects your company from unforeseen claims that may otherwise jeopardise your business. This form of insurance is designed to cover legal fees, compensation payments, and other expenses arising from lawsuits alleging injury or property damage caused by your business operations.

The importance of fully understanding the scope of your public liability insurance cannot be overstated, as it forms a critical part of your business’s risk management strategy. In this post, we’ll outline what public liability insurance includes and excludes, empowering you with the necessary information to make informed decisions about your coverage requirements.

What is Public Liability Insurance?

Public liability insurance is the safety net that catches businesses when accidents happen. It’s designed to protect against claims made by customers, suppliers, or the general public due to injuries, accidents, or property damage connected to your business activities. Whether it’s a slip on a wet floor within your premises or damage caused by your products, public liability insurance mitigates the financial strain of these claims.

Imagine running a children’s play centre and encountering an unfortunate incident where a child is injured. The potential personal injury claim from the parents could be a financial and reputational blow to your business. Consider hosting an event or seminar where a guest trips over loose carpeting and sustains an injury. Such an accident could lead to a claim against your business for failing to provide a safe environment. Alternatively, if you own a cafe and a customer suffers burns from a spilled hot drink, the ensuing lawsuit could be both financially and emotionally taxing. Public liability insurance acts as a crucial buffer, handling the compensation and legal defence costs and protecting your business’s sustainability and reputation.

Assessing Your Coverage Needs

The level of public liability insurance your business requires hinges on several factors. First is a comprehensive risk assessment that reviews your business activities. Second is the probability of exposure to public liabilities, and third is your specific contract requirements; these are all essential considerations when assessing your insurance needs. For example, high-traffic environments, such as medical centres or retail stores, inherently carry a greater risk of public liability claims than office-based businesses. Therefore, tailoring your insurance cover to match your risk exposure is crucial for ensuring optimal protection for your business.

Public Liability Insurance Inclusions

In Australia, public liability insurance extends to incidents occurring on business premises or through business operations, including injuries at events or damages caused by products. It also covers legal expenses associated with defending these claims.

  • Personal injuries to third parties.
  • Property damage to third parties.
  • Incidents occurring on business premises.
  • Incidents occurring through business operations.
  • Injuries at events.
  • Damages caused by your products.
  • Legal expenses for defending claims.

This insurance is pivotal for businesses interacting directly with the public, providing a financial safeguard against potentially overwhelming compensation costs. It’s designed to ensure your business can continue operating without the devastating impact of unforeseen liabilities, making it an essential consideration for all business owners nationwide.

Public Liability Insurance Exclusions

In Australia, while public liability insurance offers broad protection, it’s crucial to understand its exclusions. Typically, it does not cover employee injuries, which are addressed by workers’ compensation insurance. It also excludes claims related to the business owner’s personal injuries or property damage, professional negligence (which is covered by professional indemnity insurance), and liabilities assumed under certain contracts beyond common law obligations. Additionally, damage or claims arising from products known to be hazardous, such as asbestos, are not covered.

  • Employee injuries (covered by workers’ compensation insurance).
  • Business owner’s personal injuries or property damage.
  • Professional negligence (covered by professional indemnity insurance).
  • Liabilities assumed under certain contracts beyond common law obligations.
  • Damage or claims arising from products known to be hazardous, such as asbestos.

Recognising these exclusions is essential for identifying potential gaps in your coverage and considering additional insurance policies to fully protect your operations.

The Legal Landscape

In certain situations, holding public liability insurance is more than just a precaution—it’s a contractual or regulatory requirement. Contractors, for example, might be mandated by the companies they work for to maintain a $20 million public liability insurance policy. Although not universally legally required, possessing public liability insurance is prudent for any business, especially those operating in public spaces or engaging directly with clients on their premises.

Morgan Insurance Brokers Can Help!

Morgan Insurance Brokers offers expert guidance on navigating the complexities of public liability insurance, ensuring your business is fully protected against potential claims and financial losses.