No matter the nature of your business or the industry it belongs to, you have a responsibility as its owner to make your workplace as safe as possible, both for your customers and your employees. With that said, accidents can still happen, and if someone gets injured or has their property damaged in their dealings with your business, you may be ordered by the courts to pay a significant amount of money as compensation. Such an incident can have a detrimental effect on your business’s long-term sustainability and profitability.
Fortunately, there are measures you can take to protect your business from such incidents, and one of them is by getting a public liability insurance policy. In this article, we’ll be talking about what is all about, how it works, and what kind of benefits you stand to gain when you take one out for your business in Australia.
What is public liability insurance?
Public liability insurance is an insurance policy that protects you from monetary loss if you are found legally liable to compensate certain customers or individuals who have suffered injury or caused property damage at your place of business. Examples of scenarios where you may be compelled to pay for compensation include the following:
- A customer inside your business premises suffering an injury after slipping and falling
- An employee hurting themselves and suffering an injury while on the job, such as with a tool, heavy equipment, or falling from a high place
- A customer’s property being damaged while using your product or service, such as their car being damaged by car wash machinery or personnel
Other scenarios where you may be required to pay compensation may also involve accusations of false advertising, invasion of privacy, intellectual property theft, and more. Depending on the extent of the injury or property damage, the amount of money you are asked to pay out of pocket could be enough to severely hamper the growth of your business or its ability to operate.
How does having a public liability insurance policy protect my business?
A public liability insurance policy protects your business by covering your expenses when you are subjected to a compensation claim. This includes the compensation claim itself as well as any legal fees that you may incur.
By having your insurance policy take the brunt of the financial impact of the claim, your company’s resources will remain intact. As a result, your business will remain operational and profitable, even in the event of a significant penalty.
How do I know if my business needs a public liability insurance policy?
Generally, all businesses should have this type of insurance policy, regardless of its size or service. With this in mind, you should consider getting one if your business has the following:
- An establishment where customers must personally enter in order to purchase your product or to communicate with you or your staff
- Inherent occupational safety considerations for your employees, such as the use of power tools, heavy equipment, or hazardous environments
- The potential of a service or product to adversely affect a customer’s health, even in cases where that potential seems remote or the effect is deemed minor
- The potential for a service or product to cause damage to customer’s property, such as a car wash or house cleaning service
- Considerable physical risk to members of the public in the proximity of your worksite, such as a construction site.
One good rule of thumb to keep in mind is that if your business comes into physical contact with the members of the public, then you need this type of insurance.
What are the other benefits of having a public liability insurance policy?
Besides ensuring that your finances are kept secure even if you are found to be legally liable for compensation, you stand to enjoy the following benefits to having this kind of insurance policy:
- Customer confidence. You may encounter customers and clients who ask for proof that you are covered with insurance before doing business with you. By having one in the first place, you avoid an event where a potential client turns you away because you lack this type of insurance.
- Employee assurance. Your employees will be more secure knowing that, even if an incident were about to occur, your business can weather it thanks to a solid insurance policy. This will help protect their morale and productivity.
- Reputation preservation. By being covered with insurance, you will be able to deal with embarrassing incidents more quickly and efficiently. This reduces potential harm to your business’s reputation and how the general public perceives you.
Having public liability insurance is essential in today’s business world
At a time when even small setbacks have the potential to significantly affect competitiveness, your business should strive to limit its vulnerability to harmful chances. First, you should ensure that your business premises and practices are as safe as possible to minimize the possibility of accidents. Second and more importantly, take out an insurance policy from a trustworthy insurance provider.
By carrying out these steps, you will insulate your business from significant financial harm should an injurious or property-damaging accident occur. Not only will your business be more secure in times of legal challenges, but it will also be more aware of potential risks. This will then allow you to take further steps to create a safer and more productive enterprise.