Every business, no matter the size, has a duty of care to the general public. If a claim is made and your business is deemed negligent, the courts will award costs and damages against you. Where a business is the manufacturer or distributor of a product it may also be liable for the failure of those products that it sells under the Trade Practices Act.
A thorough Products and public liability insurance policy should provide the following cover for all your business activities:
- Provision and coordination of a defence from claims made against your business
- Where your business is deemed negligent; provision for payment of costs and damages, including compensation for bodily injury or property damage that are awarded against you
In Australia, the majority of successful claims are for simple slip and fall type injuries. This is an alarming fact, as this type of injury can happen to any business and on any work site, including offices.
Therefore, every business should have a Public and Products Liability policy in place.
It is important to know that your policy will not cover you for criminal or wilful misconduct and most policies will exclude exports to North America and Canada (unless specifically included via an endorsement).
Who needs Public Liability Insurance?
All entities that have a legal status, from large commercial enterprises through to sole traders.
As organisations are becoming more risk averse, they require their business partners to have insurance in place. All property owners have a lease requirement that their tenants have a policy in place.
Always discuss with your insurance broker before you alter your business activities. This is vital so that the insurance policy can be amended to include adequate coverage for all your activities and/or products/services.
Do not enter into agreements that add a third party as an insured or have phrases like “hold harmless” or “waiver of subrogation”.
When checking someone else’s ‘Certificate of Insurance’, make sure that the business activity stated actually reflects the tasks they perform. It is very easy to purchase a cheap policy that in fact does not cover the organisation’s real occupation.
Be aware that not all ‘Certificates of Insurance’ are the same. You should take care if the insurer is not approved by the Australian Financial Services Regulator (APRA). A Certificate of Insurance is worthless if the insurer does not have the capital to pay a claim.
Always keep thorough documentation of accidents or incidents that may arise into a claim. Often claims are received many years after the event, so it is important to request current employees and witnesses to provide an incident report.
To obtain a quotation or further information on Public and Products Liability Insurance, contact our office.