Every year, numerous businesses suffer financially and even close down due to negligence which results to injury to its customers. In Australia, business owners are keen on avoiding such risks especially if the business owner owns a business or company that provides services or products to customers.
Aside from practicing safe business practices, business owners use a form of insurance that protects them from such liabilities and this insurance is known to Australian business owners as public liability insurance.
If you are a business owner and your line of business is offering services to customers or selling products to your market, you need to protect yourself from liabilities that could not just lead to financial trouble but could also cost you your reputation.
You have fought long and hard to maintain your business name and have made a lot of efforts for your customers to recognize your brand among other companies that offer the same service or products so why take the risk?
PL insurance is just one kind of insurance product that protects business owners; there are a lot more types of business insurance that may be suitable for your kind of business.
The best way to find out if your company or business needs this kind of insurance is to get to know what it is, what involves and to differentiate it from all other similar insurance products.
What is public liability insurance Australia?
Learning the definition will help business owners learn if this type of insurance product is suitable for their business. Here is a short but realistic definition of what it is:
This insurance is a kind of insurance wherein a person/member/public is compensated for any injuries, due to negligence of the policyholder or his/her employees or workers.
And so looking at this definition, this kind of insurance basically protects business owners from themselves. It ensures that any kind of service or product that may cause injury, or death in worst case scenarios, will reduce the effect to the policy holder.
Business owners should keep in mind that no matter how careful or how meticulous his business practice is there could still be a chance of an error or any kind of mistake that could lead to injury or even death.
This kind of insurance creates a cushion as the insurance company takes care of a portion or all of the finances that the other party may incur due to the injury.
- This may cover medical expenses that the other party may incur such as emergency room fees, consultation fees, surgical fees, confinement fees, fees for medicines and supplies, therapy fees and so on.
- This may cover fees that the other party may incur due to psychological consultations.
- This may cover the other party’s financial loss as the head of the family, as a professional and so on.
- This may cover the other party’s business financial loss due to damages to his business site.
- This may cover psychological trauma as a result of the injury
- This may cover expenses for the death of the third party.
- This may cover expenses that are not expressed in this list.
Looking at the mentioned coverage of PL insurance you may think that this type of insurance could be very costly and how could a small to medium scale company like yours afford this.
Actually, the insurance market these days have become very competitive and this stiff competition has made insurance premiums for this kind of product more affordable than ever.
If you are a small to medium scale business owner or you are just on a start up, you may want to view your choices when it comes to PI insurance. A selection of the best companies in Australia at the end of this article will be able to help you out.
Does my business have to have it?
A lot of business owners may certainly think if they really need insurance or if this is compulsory or not. The answer is no. Australian businesses are not obliged to have PL insurance and some industries may even have different sets of rules when it comes to the liability of business owners to their customers.
This type of insurance is not compulsory but business owners are advised to never take risks. What they should do is to assess the risks that their businesses could be facing according to the services that they offer.
Is the risk worth taking? Here are some scenarios that you should keep in mind if you are a business owner without PL insurance:
- If your business is providing services to customers such as an electrical or plumbing contractor then you could face a lot of risks in just a very small mistake or miniscule error by your workers.
- If your business is providing services to prominent clients you need to protect yourself from risks. Even the smallest mistake could be magnified especially when it involves injuries or damage to property.
- If your business operates under a government issued license then you may be obliged to secure PL insurance to protect your business.
- If you have poured a lot of time, effort and money in improving your business brand then you should waste no time taking PL insurance right away. Remember that even a very small mistake could lead to terrible financial battles, court time and most of all serious defamation of your brand or company.
What does this insurance actually do?
PL insurance covers all the damages that are caused to another person and his/her property. This includes injury or even death of the other party.
If your business has this kind of insurance coverage it is presumed that you are completely protected from all kinds of risks. Two examples of how public liability insurance protects policy holders are as follows:
- Public liability insurance for events. This kind of insurance is suitable for businesses that arrange different kinds of events such as concerts, company events, sporting events and so on. Events such as these could be at risk of being ruined or postponed even after all the preparations have been made. Adverse weather conditions, performance accidents, performers or entertainers not showing up, all these could lead to postponement or cancellation of the event and therefore a huge loss to your company. By having PL insurance you can have these risks covered to protect your investment. Aside from careful planning and overseeing all the possible risks, you have a cushion to fall on in case terrible and unpredictable things happen that could ruin or cancel your event.
- Public liability insurance market stall. This is a type of insurance that is recommended for market stall operators and vendors; it covers your liability for any damage to property or injury as a result of the products that you sell. This type of insurance is very flexible since business owners or market stall operators may choose from a variety of policy lengths according to the number of weeks or months that they would operate a market stall. Policy holders may sell in any kind of market, attend trade exhibits and sell their products with utmost peace of mind anywhere in Australia when they have PL insurance for market stalls.
- PL insurance also protects business owners that work from home through a business home insurance. This ensures that your business contents and stock are protected against different kinds of defined events. This also covers home and contents against events since your business office is found in your home.
As you can see, it may not be mandatory to take this insurance, however why should business owners take any kind of risks?
You can never neglect your customers, having suitable coverage not just protects your business, but also shows that you care a lot when it comes to offering the best service and products to your customers.
What is the difference between private and public?
One of the most important goals of any business owner is to provide high quality service to his customers and a part of providing quality service is to ensure responsibility that third parties (which include their customers) are safe from harm in taking their services or using their products.
Private and public ensures that a business owner is protected from any kind of risks.
Private and public liability insurance helps business owners provide quality service and products to customers however these are two different kinds of insurance products. Oftentimes business owners tend to confuse each one from the other.
It is true that both benefit business owners and both insurance products share some similar points but these two differ according to the business that they actually apply to.
Public and product liability insurance protects businesses from financial risks in case the business is found to be liable to the injury or death, financial loss or loss of property of a third party. This kind of business insurance product basically applies to businesses that sell products or provide services.
On the other hand, private liability insurance is coverage for a person against any kind of losses, physical injuries or death as a result of the person’s mistakes.
This kind of insurance provides protection to a policy holder in such events that may result to his negligence or carelessness. It may be applied to a business owner that provides special services such as offering advice or performing delicate tasks that demand concentration.
What is the difference between Professional Indemnity Insurance and Public Liability Insurance?
Business owners also tend to confuse professional indemnity insurance from public liability insurance. Yes, both business insurance products protect business owners from risks that could happen as they provide services or sell products to customers however there are distinct differences between the two.
PL insurance coverage protects business owners as well as their businesses from any financial risks should they be found liable for third party injuries, loss or damage to property or death due to negligence.
This is suitable for businesses that sells products or goods or provides services such as a plumbing contractor, an electrical contractor or a computer service technician.
Professional indemnity insurance provides coverage for business owners as well as their businesses against any kind of legal action due to physical losses or financial losses as a result of professional their professional advice.
This is suitable for businesses that provide professional services such as financial advice, legal advice or medical advice. Therefore this kind of business insurance fit professionals more than public liability.
Are the requirements for liability insurance different state by state?
Public liability coverage is basically similar no matter where you are in Australia however there are some states that require business owners some form of coverage while some may not be too lenient.
A look at the requirements of PL insurance from state to state will help business owners provide seamless service and impressive product quality no matter where they are in Australia.
Public liability insurance QLD
As mentioned, PL insurance is pretty much the same in almost all states, but in Queensland, there are some exemptions. Electricians in the state are required to secure PL insurance along with an option called consumer protection.
This mandatory requirement ensures that consumers are protected from contractors that provide electrical repairs and maintenance in Queensland. Before a working certificate is issued to an electrician, he/she should have a policy worth at least $5 million while the amount in the consumer protection option is at least $50,000.
Public liability insurance NSW
PL insurance is one of the most common requirements for business owners in securing a license in NSW. In New South Wales, this kind of insurance is available in amounts that range from $5 to $20 million.
Local government understands that having PL insurance is the best way that businesses could protect the welfare of customers and therefore it is one of the most important requirements to secure a business license.
Most NSW business insurance brokers may be contacted by phone but if you prefer a more efficient service and consultation then you should talk to a broker personally.
Public liability insurance VIC
In Melbourne is mandated to all plumbers. The Victorian Government requires all plumbers to first secure liability coverage before they are granted license.
As an additional requirement, plumbers are also mandated to have a Victorian Plumbers Warranty which provides compliance certificates to Victorian plumbers and a 6-year warranty for their work.
Plumbing contractors need to have a minimum of $5 million public liability insurance which covers all the possible liabilities for their work and the costs that arise within the 6-year warranty period.
The Victorian Government seeks to protect consumers from any damages and injuries which is why plumbers should follow this requirement or face non-license.
PL insurance WA
Almost all industries in Western Australia are mandated by their own respective licensing agencies and one of the most important requirements before any businesses are allowed to provide services in the state is PL insurance.
WA industries believe that having a PL license protects business owners against any kind of liability plus this type of business insurance product also ensures that consumers are also protected against businesses.
PL insurance in SA
The local government of South Australia requires all businesses whether it is a professional business or a business by trade, to secure PL insurance before a license to operate is provided.
The government believes that his kind of insurance product protects business owners from possible financial losses due to legal expenses. The minimum coverage amount required is from $5 million to $20 million and this may depend on the nature of the business along with the amount of risks that are associated with the operation of such business.
PL insurance NT
Convenience is the name of the game in the Northern Territory since the NT Government has created a hotline to provide information and guidance to business owners and communities regarding liability insurance.
The said hotline, which is open from 9am to 4pm during weekdays, is created to answer any kind of issues regarding PL insurance. Although this kind of insurance is not mandatory in NT, most business license application requirements have been changed to make way for this.
PL insurance ACT
In the Australian Capital Territory, a special PL insurance product is needed by film makers before they are granted permission to shoot films in any area of the ACT. PL insurance provides coverage for any injured parties as a result of film production as well as any kind of damages as a result of such activities.
Film makers are required to have at least $10 million minimum insurance coverage; the riskier the production is the higher the PL insurance requirements may be and this may be set to $20 million.
PL insurance TAS
The Tasmanian Government has made this insurance more affordable to policy holders by abolishing stamp duty for this insurance. Taxpayers are able to save millions per year as a result and it makes PL insurance more affordable for small to medium scale business owners.
Business owners however should note that public liability components of integral policies are not included from this exemption.
Looking at the differences of PL insurance requirements in each state, a business owner would be able to easily foretell the outcome of his business application wherever he/she may be in Australia.
And learning that this kind of insurance is needed in securing some business licenses provide a head start for business owners no matter what industry they are in.
Where can I get this insurance?
There are several insurance companies in Australia that provide PL insurance. It is important for business owners and consumers to get to know the features and components of each PL insurance plan and the best way to do it is to use a public liability insurance compare table.
Business owners that own and maintain small to medium scale businesses usually look for cheap insurance and therefore a public liability insurance comparison will be able to help them the most suitable plan that fits their business needs and won’t leave a hole in their wallets.
Here is a list of the top insurance companies in the country. Go through each company and see what makes each one stand out. A consumer online rating is available in case you are looking for a quick reference on the popularity of the company.
At the end of the table is a link to visit the company’s official site so you can check out their services especially their public liability products.
|Company Name||Expertise||Insurance Product Features||Business Specialty||Online Quote Availability||Consumer Online Rating|
|AIG||In business since 1957||Offers a Business Pack for small to medium sized businesses with a broad & flexible range of covers for business insurance||Technical & underwriting authority in Melbourne, Sydney, Perth & Brisbane||Contact AIG via phone Australia wide 1300 030 886|
No online quote for Business Insurance Plans
|4 out of 5 stars rating|
|Allianz||Covers over 75 million people in 70 countries It is Australia’s 4th largest provider||Wide range of business insurance & risk management products & services, save up to 10% when you buy policy online||Leading private Workers’ Compensation, tailored policies to suit your business||Online quotation available||5 out of 5 stars rating|
|CGU||One of Australia’s largest general insurers, with experience of over 140 years||Provides an IT liability for public liability for trades and Business Pack for professional indemnity & broadform liability||Offers wide range of commercial and rural insurance products for small to large multi-national corporations||Online quotation available||4 out of 5 stars rating|
|Calliden||Partners in the field of specialty brokers and agencies for a strong position in the industry||With a Business Package designed for SME risks with Fire & Business Interruption & Liability cover, commercial packages, events, entertainment & security||Specialty Businesses such as Aobis, Arena Underwriting, Argis Insurance, Brooklyn, Dawes & motor insurance||Contact Calliden for business through its insurance partners||4 out of 5 stars rating|
|Vero||Has been providing insurance products for more than 170 years||Offers flexible packages, secure and easy claims 24/7||Specializes in motor trade, mobile, retail business & professional services||Vero recommends talking to a broker personally. Find a broker through an online tool||4 out of 5 stars rating|
A public liability insurance quote is a great way to find out what’s in store for you as you pick a product from an insurance company. Take time to answer a public liability insurance online quote; you may even tweak the data you have provided in each quote so you can find the most suitable PL insurance coverage for you and your business.
Public liability insurance coverage differs from one business insurance provider. A smart consumer therefore needs to actively find out more about a company’s insurance plans and features before he decides on which one to take.
Here are some top 10 tips to find the most suitable PL insurance coverage for your business:
- Always use an online quote service and if this is not available, you may contact customer service before you decide on any kind of insurance package. But of course an online quote is not exactly the package that you will take; this is still an approximate value. You can still make changes on the information that you have provided on the tool to come up with a suitable package option that will not just cover your business but will also suit your budget.
- It is expected that small to medium scale business owners are looking for ways to save and so aside from using a free quote service it is recommended that they talk to an insurance broker in person. What are the benefits of personally talking to a broker? Well for one you will get all the information about PL insurance at once. All your questions will be entertained and you may even get a suitable and affordable offer compared to getting a quote online. If you are satisfied with the quote, you can even sign up for a PL insurance plan right away if you are talking to an agent!
- Should you talk to a local or interstate agent? A local agent is versed on the local rules and regulations regarding PL insurance however may have limited knowledge on coverage requirements for other states. An interstate agent will be able to walk you through coverage for your business especially if you conduct business throughout the country. You may even count on interstate brokers to guide you in international liability licensing as well if your business deals with international clients or customers.
- Get quotes from as many as three to four insurance companies. This could be very tiring at first however this ensures that you will find only the best coverage for your business.
- Be aware of local laws that cover businesses regarding PL insurance. As mentioned in the previous sections, each state has special regulations regarding licensing of businesses in their respective areas and therefore you must be aware of these rules to avoid risks.
- Do not underestimate risks! Accidents and errors could happen at any time and being a small or medium scale business owner, you cannot afford to take any kind of risk. If you are unaware of the potential risks that your business may be facing, a business insurance broker could help walk you through.
- Be aware of the financial stability of each company not just the features and benefits of the insurance package that you want to get. It is always smart to do business with strong and experienced insurance companies simply because you do not want your insurer to declare financial troubles or even bankruptcy when you need coverage the most!
- In reviewing your options, you should check on the conditions of claims payment of the insurance company. There should be a seamless way to seek claims so this won’t be a problem in case you need to do the same.
- Always be steadfast even if you have already purchased PL insurance. Read reviews constantly, take news articles seriously and always find out the status of your insurance company. Remember that you can always check out other insurance providers before your coverage runs out if you are not satisfied.
- Secure your business; formulate safe and seamless business practices to secure your company. Conduct employee training, product testing, market research and other strategies to secure your business. Having flawless business practices will reduce the risks of mistakes and costly errors.
How much is public liability insurance?
Just like other insurance packages, public liability insurance cost will be according to any potential risks that are associated with the business. It could be difficult to come up with an exact amount and therefore the best option would be to consider some of the most important factors that affect public liability insurance premiums to get an approximate amount. Here are some of the factors most considered by insurers:
The business nature
A thorough look at what the business is all about will enable insurers and brokers to understand the possible risks involved and of course to come up with an approximate amount of how much PL insurance coverage is needed by the business owner and the business itself.
The nature of the business involves what kind of activities that the company undertakes. Usually an insurer will look into past claims related to personal injury, property damage or death that are present in other companies or other businesses with the same kind of service or products.
For instance, to be able to assess how much PL insurance coverage is needed by a plumbing contractor in a particular state, the insurer will make a review of all the actual claims that have arose from other plumbing businesses in the area.
He/she may also look for information on other possible claims from other states especially if he/she is an interstate broker.
It is safe enough to conclude that there is larger coverage for businesses that provide more complicated services and products compared to other businesses.
The size of the company or business
The larger the business the higher the risks for any kind of mistake or error to happen. Insurers usually use figures to estimate the number of employees that a large company has; the most commonly used data is the annual turnover of the business as well as the number of staff for the business year.
The actual location of the company or where the business is located
Needless to say businesses that are located in high risk environments are riskier compared to those that are located in the suburbs and in residential areas.
Places that may be called high risk are construction sites, railways, ports, airports, mining and so on. But of course businesses near residential areas may also become a liability such as a gas/petrol station near a community.
An insurer takes all of these into consideration when deciding on the most suitable coverage for a business.
So should your business rely on cheapest public liability insurance?
Before you say yes to the cheapest or the most affordable PL insurance, you must take time to compare public liability insurance. Remember that a cheap insurance coverage may not be enough to provide you with sufficient coverage. Your insurance may not be mandatory but could be a vital part of your company that could even save your business in the long run!
You may still want to explore ways to actually have cheap or affordable insurance coverage for your business. Here are some techniques to guide you in finding an affordable cover:
- Scrutinize PL insurance packages or plans offered to you. If you are talking personally to an insurance broker then you should ask for ways you can reduce your premiums and get a good deal. There are different ways to reduce monthly insurance premiums for every business or industry and therefore talking to an insurance agent would benefit you the most.
Some ways to actually reduce premiums is creating safe business practices, using security measures in and around your business location, strict employee training, using efficient strategies to regularly improve your products or services and product quality control. Reducing premiums is different from reducing your business cost and therefore you should take time to think about these strategies rather than cutting down on costs that can impair your business.
- Hire a professional to help you out. There is no doubt that you can be free from risks when you understand what will happen if such events are encountered in the future. A professional broker will be able to help you look for the most suitable coverage based on an accurate and experienced assessment of the risks that your company may have. Relying on an inexperienced broker or insurance agent may only cost you more than what you can afford when you face undetermined risks in the future!
- Be a vigilant business owner and do all you can to improve your company or business. It will cost less to insure a company that is aware of its risks. Learn more about your industry and your market so you can develop products and services that are at par with industry standards.
- Compare PL insurance rates and premiums. As mentioned, even if you already have PL insurance, it is never too late to shop for the best! Evaluate your coverage regularly. For instance you should evaluate each year or every five years so you can become updated with new insurance features and of closely evaluate features that you may not need anymore.
- Choose business insurance packages rather than a standalone PL insurance plan. Definitely a package service costs less than a single product. Most insurance companies like Calliden, Allianz and AIG have specific business plans and packages; consult a broker to help you choose the right plan for your business. You may even find companies that are willing to create your own business package or plans so be mindful of the choices you have.
- Business insurance packages change and these happen even without your knowledge and same goes for different business practices that are prevalent in your particular industry. If you are not mindful of these changes, you could end up having a lot of liabilities in your hands! Become a member of industry agencies and commissions in your line of business and be active in creating new ideas to help improve business practices. You will not just help provide a safe and secure environment where your business can grow but also help other businesses as well!
Cheap PL insurance for small to medium scale businesses
Small to medium scale business owners have a lot of options in their hands when it comes to shopping and choosing PL insurance plans. It starts with asking around for the most affordable rates from insurance companies.
There are programs to help small to medium scale business owners that are offered by insurance companies and insurers. You should never overlook these options at all.
It pays to be ready, so they say, and in a business perspective, it pays to be ready for any kind of risk that could affect your business. You have worked so hard to start your business, you have invested time, money and effort to get your business on the right track and most of all, you and your family rely on your business to reach your financial goals. Therefore, why should you overlook getting this insurance?
It is not too late, talk to an insurance broker or agent in your state or an interstate broker. Check out and compare features, prices and rates of insurance companies.
By being a smart consumer and business owner will you be able to get smart PL insurance coverage for your business!