If you’ve spent any amount of time looking into the key risks most businesses face, you’ve probably heard you need to get public and products liability cover. If you’re a professional, such as an architect, bookkeeper or marketer, you may have also heard you need professional indemnity insurance. But what risks do these kinds of insurance protect against, and why are they so important? In this article we help explain what your business may be accountable for, and how to keep yourself covered.
If your business has a storefront, such as a café, hair salon, or fashion retailer, it will be no surprise to hear that you have a legal responsibility to members of the public that visit your premises. In the same way, if your work requires you to visit your customer’s property, such as a gardener or an electrician, you’ll have a legal responsibility to both the customer whose place you’re visiting as well as the general public. These responsibilities are often known as public liability – the liability your business has for the effect of its actions or property on members of the public.
Whether you’re starting a business or already established, it’s important to reduce the risk of liability as much as possible. The first step in protecting yourself is to identify, manage and prevent any risks to customers and third parties that exist within your business. The second step is to take out public liability insurance.
No two businesses are alike, and each will have differing insurance needs, although in some cases, the need to purchase public liability cover won’t be optional. For example if you perform work on behalf of another company they usually will require you to hold public liability insurance. Similarly, if your business premises are located in a shopping centre or mall, centre management will request a certain level of cover.
Like the name suggests, public liability insurance can protect your business against compensation it is legally required to pay for death or injury to, or damage to property of customers or other third parties. Without public liability insurance, your business may find itself unable to afford the expense of paying damages or hiring legal assistance. In some cases, the legal fees and costs alone have exceeded a million dollars.
If your business manufactures, services, alters, imports, installs or even repairs products, there may be a risk that, if they fail to work as expected or are faulty, these products could cause injury to the customer or other users, or damage to others property. This could result in a legal claim brought against you in the courts, seeking compensation for the injuries or property damage.
As with public liability insurance, you need to carefully assess what your business’ exposure is to product liability claims, and take appropriate steps to ensure you reduce the potential risks. Taking out a suitable product liability cover can be the next step in making sure your business is protected against the unexpected and covered for financial losses that can result in the event that your business is held liable.
Allianz offers public and product liability insurance which can help protect your business against the kinds of claims discussed above. Our public and product liability insurance includes limit options of $5 million, $10 million and $20 million.
If your business provides services in a professional capacity, you may need professional indemnity insurance.1 As a professional, you have a responsibility to your client to perform your service with due care and skill. If you breach this professional duty of care, then your business may be liable to pay compensation to third parties for damage incurred as a result.1 This damage could include material or financial losses, physical injury, or damage to property.
You may be surprised by how many occupations have this kind of responsibility to their clients or customers. Among other occupations, professional indemnity insurance can cover real estate agents, loss adjusters, bookkeepers, public relation consultants and even travel agents. Professional indemnity insurance can help protect businesses when such claims arise. The costs of defending these claims can alone be very considerable.
Allianz now offers professional indemnity insurance over the phone for certain occupations*. Give us a call for more information. You can also contact your broker.
Allianz Small Business Direct has acceptability criteria for Professional Indemnity under the Allianz Office Pack and may not be able to provide cover for all occupations.
Allianz Small Business Insurance is issued by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708. We do not provide advice on this insurance based on any consideration of your objectives, financial situation or needs. Policy terms, conditions, limits and exclusions apply. Before making a decision please consider our product disclosure statement. Also view the PDS update (privacy notice).