What Level Of Public Liability Insurance Do I Need?

A market leading, and affordable public liability insurance policy is one of the best tools that businesses can have to protect themselves against lawsuits and claims. Unfortunately, finding and purchasing this insurance can be confusing. The cost and level of public liability cover you need will depend on numerous factors such as the type of business, unique risks, location, and industry. In this article, we’ll discuss the factors that you should consider when choosing what level of public liability insurance you need.

Selecting The Occupation That Best Describes You

Finding the best occupation or description of your business and services is sometimes the first and most frustrating task of purchasing insurance. Ultimately it is up to you to select the best occupation that suits your business and services - this may be just by using the broadest occupation available to you in the insurance partners list. This may be one occupation, or a number of occupations and activities with a split of your revenue against each. It’s important to select the best occupations that best describe your business and the services you provide. If you still aren’t sure then you can always ask a representative to help you too.

Understanding Insurance Coverage Terms

As a business owner, you need to make sure that the insurance you carry can cover the liability that comes from most situations. There are a couple of factors that need to be considered when selecting the right insurance coverage for you. Not understanding the following terms could leave you exposed to financial liability.

• Limit of Liability - This amount is the total maximum amount that your insurer will cover for all claims during the policy period (which is typically one year). For example, if you carry a policy with a limit of $20m you’ll be covered for any approved claim up to $20m. It is also the total amount an insurer will pay in relation to assisting you in the defence or settlement of the claim.

How Much Insurance Coverage Does Your Business Need?

There is no one-size-fits-all public liability insurance policy for every business type. Some businesses naturally have higher risk (construction, health services, etc.). Carrying too much insurance will increase your regular business expenses, however, carrying too little could lead to bankruptcy if you are sued for an amount your business can’t afford. Fortunately, business owners have plenty of experts who can help guide you through the process of selecting your coverage level, these experts can include:

• You - You know your clients, suppliers, customers and the risks in your industry, as well as your total revenue so you may know the amount you can afford to pay for insurance plus consider the likelihood, cost or risk of claims. For many, having insurance in place for your business gives extra certainty and peace of mind for you and your clients.
• Insurance Broker - An insurance broker can help you understand the average risk based on their experience of arranging insurance for other businesses.
• Other Business Owners - Talk to other business owners in the industry to find out what levels of insurance they carry to protect their business. They might also be able to share advice on the highest risk factors to avoid.
• Industry Bodies - Some industries have associations, official bodies or trade groups that provide informational resources and recommendations about what insurance limits are common for your line of work.
• Accountant - They can help you understand the level of deductibles or other cash flow issues that you need to take into consideration in the event of a lawsuit.
• Council - Many councils and government entities have insurance requirements, particularly if you are working with them, or using their land/property while conducting your services.
• Other Third Party Demands - Some contracts and clients, especially banks, landlords, or larger companies have insurance policy requirements for vendors or contractors who work on their properties which include minimum limits of public liability insurance being held. In Australia this is often requested as either $10m or $20m Public and Products Liability Insurance. For Professional Indemnity, it may be only that you hold appropriate level of insurance, however it is always best to check your major client contracts.

Find Public Liability Insurance For Your Business

Here at upcover, we're all about making life easier for small businesses. That's why we built our instant quote generator, where you can get an estimate on market-leading public liability insurance with a range of limits in seconds! We also offer a range of other products including insurance for allied health professionals and cyber & privacy liability insurance. Simply enter your occupation and expected revenue into our instant quote generator to get started today.