Public Liability insurance is extremely important for all businesses to have and even more so if your business interacts at all with customers and/or the public. This includes either at your business premises, when undertaking work at a client’s site, or when working in or on a building owned by somebody else.
It can cover your legal liability in the event that your business damages someone else’s property as a result of an act of negligence. The consequences of not having suitable cover can be devastating, as legal and property repair costs can quickly escalate and prove financially crippling.
What Public Liability insurance covers
Public Liability insurance covers a range of situations that could occur as part of your day-to-day business activities. It may include covering repair or replacement costs for damage that you’ve caused to a third party’s property and your legal expenses in the event a public liability claim is lodged against your business.
It’s important to note that your business must actually be held liable in terms of the legal definition; that is, that you have actually done something wrong to cause damage to a property. In the event that it would have happened anyway, despite what you did, then your business is generally not liable even if you feel morally responsible.
Who needs Public Liability insurance and why?
All businesses should hold Public Liability cover as a necessary component of their risk management programme. In many circumstances, a contract between a business and a client will require a certain level of public liability cover in order to secure the contract and be on site, so it is often a requirement in order to undertake work.
The reality is that mistakes can occur at any time and every business carries some degree of risk and exposure if they have clients that visit their premises or visa versa. For example, if a tradesperson damages a person’s house whilst undertaking renovations, or building materials such as roofing are not secured correctly and fall off damaging third party property, then your business could be held liable for the damage. Hence why it is so important to have public liability insurance cover to protect your business and provide you with peace of mind.
The trades industry generally has a high level of exposure to public liability risks through the work they do on third party premises and will often be required to have public liability insurance before they are allowed to enter a site.
However, any business that deals face-to-face with their clients or visits/works in, or on, someone else’s property has exposure to causing damage. This includes businesses that rent office space and accidently cause damage to the building that they are then liable for to other tenants, or a delivery driver who damages a property when unloading goods, for example.
The opportunities for accidental damage to occur are significant and every business needs to be aware of what that means for them - for example, would they be able to afford the cost of repairs without having cover?
The importance of seeking advice from a broker
As Public Liability insurance can be challenging to understand for many businesses, it’s recommended that you seek advice from an NZbrokers Member who can help you assess the level of risk and exposure that your business faces in your normal daily activities.
It’s important to make sure that you have the right level of cover so that you are fully protected against all eventualities should the unexpected happen. Similarly, you don’t want to have to pay for a level of cover that you may not need so talking to an NZbrokers Member will ensure you are correctly insured for the right level of risk to your business.
They will also be able to answer any questions that you may have, for example whether you may require different levels of risk protection for different types of contracts and help clarify the policy with you by talking through claims examples.
In the event that your business is held liable for damage to a third party, a great broker will prove invaluable in handling the communications with other parties on your behalf and advocate for you where needed.
For assistance with your public liability insurance requirements, contact your local NZbrokers Member today.