Your Top Questions About Public Liability Insurance Answered

Launching and successfully running a new business means having to stay on top of a horde of responsibilities. And if you are new to entrepreneurship, you will quickly realise that most of the logistics involve spending your business's capital. Therefore, as a responsible business owner, you could be trying to figure out where you can cost cut so that your new business stays liquid and breaks even. But before you overlook public liability insurance under the guise that it is inconsequential for your business, you should know that there is a wide range of misconceptions surrounding this insurance policy. Therefore, the only way to determine if this insurance product will be relevant for your small business is by acquainting yourself with what it entails. This piece answers a few top questions that you may have about public liability insurance.

Is public liability insurance only viable for product-based businesses?

If you are familiar with public liability insurance as a policy that protects businesses from financial repercussions stemming from damages caused to consumers, you could be thinking that this insurance product is specifically designed for product-based businesses. However, you would be mistaken. Certainly, product-based businesses are at a higher threat of lawsuits stemming from subpar goods. Nonetheless, the service industry is not exempt when it comes to causing harm to clients. As long as there is always the risk of your operations inflicting damage to your customers or their properties, you need to prioritise purchasing public liability insurance.

Is public liability insurance mandatory for Australian businesses?

Another common misconception that some people have regarding public liability insurance is that it is a compulsory product for Australian businesses, but this is false. Nonetheless, simply because you are not legally bound to purchase public liability insurance for business does not mean you should overlook it under the guise of saving costs. The first thing you should know is some industries require contractors to have public liability insurance before they can be granted any licensing. For example, if your company provides electrical services but your contractors are not licensed due to a lack of public liability insurance, you will lose business. Secondly, public liability claims can be incredibly expensive to settle. If you do not have public liability insurance, a singular lawsuit could run the risk of putting you out of business. Overall, while this type of insurance is not mandatory, it does provide your business with a sense of security, which is invaluable.

For more information on public liability insurance, contact a professional near you.

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