Liability insurance can be complex, but we make it simple.
The most common exposure that almost always requires cover
Cover if you manufacture, produce, or sell products of any type
Insure the property of others that you are responsible for
Whether you’re operating a business or generating income from a residential or commercial property, liability cover is absolutely essential. Almost always, a valid certificate of insurance showing your liability cover is required for commercial leases, professional contracts, and many other applications.
One of the most important things to remember is that you may need to defend yourself, even when you’re not liable or responsible. The instant that there is a claim made against you, the sizeable and potentially crippling costs of defending yourself begin. If you are deemed to be liable for negligence or carelessness, the costs of paying compensation & rectification can be even more damaging, sometimes entering into the hundreds of thousands or even millions.
When your business is on the front line of a claim of any severity or size, having an insurer to represent your interests and pay the costs associated with defending you or paying damages often means the difference between a business or individual avoiding detrimental financial loss.
Public Liability exposure is almost unavoidable, whether you own a retail store or café with plenty of foot traffic, or you’re a plumber working at a client’s home or a construction site.
Whenever your business comes into contact with others, there is a risk that of damage to a person and/or their property. This extends beyond just members of the public to anybody outside your business, such as workers from another company, or even a business that you have contracted to perform certain tasks.
Products Liability is relevant to a huge range of industries. From restaurants, cafés and any business that sells food, to mechanics selling & fitting parts, or a retail store that sells anything from clothes to electronics.
If you have the added responsibility of selling products as part of your business, damage to a person and/or their property can result from these products. This is particularly important if you manufacture the product, or import it directly from overseas, but still relevant if all products are sourced from Australian suppliers.
The exposure to each form of liability depends on the nature of the business. For example, an office place may only be exposed to public liability, an online store may only be exposed to products liability, and a restaurant will be exposed to both. The resulting exposure largely dictates which liability can be claimed against and, as such, the resulting cost of the premium.
Public Liability resulting in personal injury – Retail Store
A customer walks into a store and trips over something that has fallen off a shelf, or slips on a wet floor. Depending on the circumstances, any injuries the customer suffers can become damages payable at the store owner’s expense.
Public Liability resulting property damage – Tradesperson
An electrician is working at a client’s home and leaves some roof tiles ajar while working in the ceiling. Heavy rainfall causes significant water damage to the client’s home, resulting in major repairs at the fault and cost of the electrician.
Products Liability resulting in personal injury – Restaurant
A restaurant prepares meals with contaminated food, and several customers become ill. Even if the contamination is the fault of the supplier of the raw products in question, the restaurant owner can easily be deemed negligent for serving it and can be brought into a claim for the resulting damages.
Products Liability resulting in property damage – Manufacturer
A business assembles structural components for residential buildings and supplies them to builders. A faulty product results in a major failure and damage to the surrounding structure, which is traced back to the manufacturer of that product, rather than the installation by the builder.
Limits of Cover
Liability policies are designed to provide your business with protection against the losses that can arise from fighting personal injury and/or property damage proceedings, and the potential of paying out large sums of money in compensation and penalties. As such, the common limit for many industries and most commercial leases is $20 million, which is what we always recommend as a minimum.
Contractors, Subcontractors & Labour Hire
The use of this personnel is very common in the trade industry, but this also exposes businesses to additional risks. If one of these parties is found liable for personal injury or property damage and they don’t have their own valid & effective policy in place, the contracting party can be held liable. While businesses who contract work should always ensure that their contractors have their own insurance policies in place, there are some other precautions that can be taken. A small business insurance policy that insures liability may be able to offer extensions to help protect your business if one of your contractors has not kept their own liability cover up to date.
This is an important distinction that clients have been consistently caught out on. If you perform a task that needs to be re-done for any reason, most liability policies will not offer any coverage for the cost to your business to undertake this work. This can be a damaging and costly exercise when considering both labour and materials. We can source products for you that include this cover and will make a point of asking you if this is something you’d like to be protected against.
Product Recall Expenses
When a batch of products is faulty, inadequate, or potentially damaging, the disruption and resulting cost to your business can be severe. This is another specific circumstance that most liability policies will exclude, but if this is something that could harm your business, we will endeavour to find a product that includes cover for this.