What is public liability insurance?
Public liability insurance covers your potential liabilities to third parties for personal injury or property damage, should you or your business be found to be negligent. Statute laws impose a 'duty of care' upon certain people, including employers, owners of property and suppliers of goods. If you are found to have breached your duty of care, you may be liable for damages.
If your organisation requires your customers or the general public to visit your home or business, or if you visit their premises, you should consider taking out public liability insurance. The owners and operators of organisations have a responsibility to those visiting or engaging in activities on their premises.
Public liability insurance is available to individuals, businesses and non-commercial organisations. It provides legal protection to a range of operations, including home-based businesses, shopping centres, swimming pools, carnivals and fetes or event centres. For some organisations, public liability insurance is mandatory. You should check the specific requirement of your legal structure.
Why is public liability insurance useful?
Public liability insurance will need to be considered depending on your type of business activities. Even if it's unlikely that someone will make a claim against you or your business, public liability insurance may be necessary.
Without public liability, you may find yourself unable to afford the costs associated with defending a claim or paying damages. In the event of a claim being made against you, public liability insurance will cover costs and expenses as well as any damages awarded to the injured party.
A range of public liability insurance policies are available to cover the different requirements of organisations. The costs involved in taking out a policy will depend on a range of factors including the size of your business, type of premises, the activities it conducts and the number of people it employs.
Liability and 'duty of care'
Liability can arise as the result of 'strict liability' - this is liability that is specified by a contract or required by law. Or it can arise as a breach of the 'duty of care' owed to a client or third party by the insured individual or organisation.
'Injuries' in this context refer to many things, such as bodily injury resulting from a fall, mental injury caused by humiliation or defamation or property damage occurring as a result of fire. In order to make a claim, the injured person needs to prove that a duty of care existed, that it was breached and that material damage was caused by the breach.
To reduce the chances of a claim being made against you, it is important to take steps to identify and manage any risks within your organisation.
Who can help?
An insurance broker can assist you with further information on the different policies relevant to your operation. Each business will have different requirements, so it is important to seek the advice of qualified professionals with experience in the area of public liability insurance. You can search for an insurance broker on the Insurance Brokers Network of Australia or National Insurance Brokers of Australia websites.
Alternatively, you can go directly to an insurance company. They will be able to tell you what cost and type of cover they are prepared to provide, given your particular circumstances. Importantly, insurance brokers act as your representatives and work in your interests, whereas insurance agents may act in the insurance company's interest.