The definition of public liability insurance is easy to understand. This coverage is a type of business insurance designed to protect companies from legal claims. These claims are typically made from members of the public that occur on your property – typically in the form of injuries during day-to-day business activities. Another name for public liability insurance is third-party liability insurance.
Why Is Public Liability Insurance Important for Businesses?
This type of insurance coverage is important for all businesses for a few different reasons. Some of those reasons include:
- It provides protection from financial ruin. If someone were ever to get injured on your property during business activities, they could sue you. For example, they may slip and fall in your store after one of your employees mopped the floor. This could lead to the business having to pay the customer’s legal fees, medical expenses, and pain and suffering. Without this coverage, this can become very expensive.
- It’s a way for businesses to experience peace of mind. Just knowing that your company is safe and protected from potential accidents definitely feels great for business owners and the company executives alike. This insurance provides a level of safety and comfort that makes it very easy to sleep soundly at night.
- It’s legally required in certain industries. Most contractors, sole traders, and business owners would benefit tremendously from this insurance coverage.
- It’s a cost-effective way to protect your business. For the most part, this coverage is relatively inexpensive, which is a big benefit because it doesn’t cost much to feel peace of mind. It doesn’t hurt to know that your business isn’t going to crumble if someone accidentally hurts themselves on your premises.
What Specific Areas Do Public Liability Insurance Cover?
- Bodily injury
- Property damage
- Medical payments
- Damage to rental property
- Legal expenses
What Companies Typically Require Public Liability Insurance?
As you are about to see, there are a number of different types of businesses that require and benefit from public liability insurance. Mark Vanzo from Public Liability Australia states that “the companies that should definitely mitigate their risks with the proper level of business coverage include the following types”:
- Professional Services Firms
- Contractors
- Hotels and Motels
- Spas and Gyms
- Travel Agencies
- Retail Businesses
- Bars and Restaurants
- Event Planners
- Tradespeople
- Charities and Non-profit Organizations
Are you in any of these industries? It would be wise to contact an insurance broker immediately to learn more about your options for public liability insurance and other types of insurance coverage. This will help mitigate risks while providing the right level of coverage to keep your business safe.
What Areas Aren’t Covered by Public Liability Insurance?
Now that we know the types of businesses that will benefit the most from this insurance protection, we will also take a look at areas that aren’t covered by public liability insurance. They include the following areas:
- Loss of Income
- Business Interruption
- Damage to Your Personal/Business Property
- Pre-Existing Conditions
- Intentional Acts
Unfortunately, this form of insurance doesn’t cover any of the specific areas mentioned above.