Insurance Policies: a Useful Guide

Public Liability Insurance FAQs

Most businesses often overlook the need for public liability insurance. Nevertheless, the cover is an essential policy that can save your business thousands of dollars in case of a liability suit. So, what is public liability insurance? This extract contains some public liability insurance FAQs to help you understand the coverage.

What is Public Liability Insurance? 

It is a policy that offers compensation to third parties who suffer injuries or property damage on your premises. The term third parties include customers, suppliers, business associates, trespassers, licensees or any other member of the general public who is neither an employee nor a business owner. Usually, your business has a duty of care to these individuals. Therefore, they have a right to sue the business if they suffer an injury or property damage due to your negligence. For instance, a person could slip while climbing a slippery staircase or suffer electrocution from frayed wires on your premises. 

Who Needs Public Liability Insurance? 

Your business needs public liability insurance if other people, except the owner and employees, access its premises. Typically, most businesses pull all stops to make their premises safe. For instance, they install essential safety measures, restrict access to hazardous areas and use non-slip tiles on slippery surfaces. While these measures guarantee the safety of third parties, accidents can occur due to internal and external factors. Therefore, you need public liability coverage to shield your business from losses resulting from successful liability claims. 

How Do You Choose A Suitable Cover? 

The general rule is to ensure that the coverage suits your business. Start by asking your insurance broker to help establish the amount of coverage you need. Two factors will come into play when determining the sum insured; the risk factors in your business premises or operations and the number of third parties that visit or interact with your business daily. Then, check what the policy covers. Ideally, it should offer recompense to the injured party and cater to property damage, legal costs, and rehabilitation. The broker should also read the policy's fine print to ensure that it does not expose your business to extra expenses. For instance, if the policy covers only one occurrence, you will have to chip in if the incident injured more than one person. 

Remember to vet the insurance company offering the coverage. For instance, examine how long the company takes to honour claims and whether the insurer adjusts the cover to suit your changing business needs.