Public liability and what to be aware of as a business owner

Public liability and what to be aware of as a business owner

In every line of business there is always the chance that something can go wrong. Whether you are a restaurant owner whose customer falls ill due to food poisoning, an office worker who accidentally spills coffee on a client’s laptop or you have a customer who slips over a spillage you were meant to clean up but never got around to. Accidents happen. It’s important to understand what exactly Public Liability Insurance is, and provided you have insurance your policy covers.

Public Liability Insurance is designed to protect your business and business-related activities against claims from third parties; including claims relating to property damage, loss or damage of goods, accidents, injuries, and even death.

As a business owner, you are responsible for any third parties who come into contact with your business or your business related activities. This includes clients, customers, suppliers, and members of the public. This is why having a Public Liability Insurance Policy for your business is so important, no matter your business size, turnover or industry.

As an business owner it is important to recognise the interaction that your Public Liability Insurance may have with other types of insurance your business may hold; such as Product Liability Insurance or Workers Compensation.

By way of example, if your employee is injured during the course of their employment, they are not covered by Public Liability Insurance, but rather, by Workers Compensation Insurance. In this day and age, not all employees or staff you may retain such as sub-contractors, volunteers and labour hire workers are classified as “workers” under State Workers Compensation Legislation, and as such, are not covered by Workers Compensation Insurance. What happens when these third parties make a claim against your business and you do not have any or adequate Public Liability Insurance? The answer is simple – you or your business may be liable for significant costs in paying at a claim.

It is important to be aware of the requirements to hold Public Liability Insurance in the state/territory your business trades in, your industry associations and professional memberships all of which may require a minimum level of cover.  In Victoria for example, all plumbers are required to hold a minimum amount of Public Liability Insurance in order to obtain a plumbing license.

If you do not have Public Liability Insurance or do not have the correct coverage the cost consequences if you are found to be negligent can potentially cripple your business – so why expose your business to unnecessary risks and costs?

Our lawyers can renew your insurance policies and advise your business to ensure your cover is adequate, up to date and covers all of your business-related activities. Contact us on 03 9670 5000 for more information.

This article was written by Zoe Fatouros, lawyer in our Insurance Department.

DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can get from marshalls+dent+wilmoth and other relevant experts.