Public and Product Liability Insurance

Sunshine Coast Insurance Brokers

Public & Products Liability protects against your legal liability to customers, clients and members of the public, (not employees) for:-

• Bodily injury, and
• Property damage

arising out of the business’ activities and/or products.

In addition to the damages awarded, the policy should cover the legal costs of investigating and defending a claim made against you, or your staff or business.  These costs often match or exceed the damages payable.  Even if you are found not negligent, during the process you will encounter significant legal costs. It is important to understand the cover will protect you against both actual negligence and allegations of negligence – even if the allegations are unproven.

Why do I need it?

The laws in Australia hold us each responsible if we cause others loss, injury or damage. This is described as your Legal Liability.
Accidents happen and by definition, accidents are unplanned, unintended and unexpected.  Being held responsible can be very costly, not just in payments to the people you have injured but also the legal costs involved to defend yourself.

Examples of claims

• A person slips on a wet floor in a hotel and breaks their leg in the fall.
• A member of the public walks past a construction site and is hit by a falling piece of debris causing injury.
• A participant in a yoga class trips on a loose floorboard in the yoga studio and injures themselves. 
• A pipe bursts in an engineer’s office damaging a visiting client’s laptop.
• Contaminated food causes a salmonella outbreak.
• A bicycle tyre is not manufactured properly and blows out while a child is riding the bike, causing injury.

How much cover do I need?

The answer depends on your business activities and the products you sell.  You may be surprised to hear that Australia is second only to the United States in the size of the court awards for personal injury. Currently in Australia the highest claim for injuring one person is $19,000,000 (just under 50% of this was for legal costs).  Our best advice is to buy as much cover as your business can afford, bearing in mind that any shortfall between the amount of insurance and the cost of a claim may expose both the company’s and your own personal assets.

Buying Liability Insurance

Public & Products liability insurance is a specialist product and should be arranged through an insurance broker with expertise in this area.

You and your broker should discuss:-

• The level of insurance cover you require. This will depend on the type of business you run.
• Choosing an excess.
• The entities and people that should be insured under the policy.
• The most appropriate basis of insurance e.g. within a business package solution (appropriate for office risks and white collar small businesses); a separate broadform liability policy, or within a packaged policy alongside professional indemnity.

Difference between Professional Indemnity and Public Liability Insurance

Professional Indemnity insurance covers your legal liability arising out of the professional advice or services you provide to your customers. If you are not providing professional advice you do not require Professional Indemnity.
For example, a client slipping and falling in a doctors’ surgery would be a public liability claim.  But if they are injured because the doctor failed to diagnose their illness correctly, then that would be a professional indemnity claim.

As your insurance broker, we can help to mitigate your risks and minimise what can be a significant financial impact on your business should the unexpected happen.