Public liability insurance is one of those things that many business owners don’t fully understand until they need it. Some think it’s only for big businesses, while others assume it covers absolutely everything. These misunderstandings can lead to costly mistakes, so let’s clear up some of the most common myths.
Public Liability Insurance is Only for Big Businesses
A lot of sole traders and small business owners believe they’re too small to need public liability insurance. The reality? If you deal with customers, suppliers, or even just have a delivery driver dropping off stock, you could be at risk of a claim.
Picture this – you run a small home based business. A courier comes to drop off a package, trips on your front step, and injures their ankle. Without public liability insurance, you could be the one footing the bill for their medical costs and lost income. Size doesn’t matter when it comes to liability risks.
It Covers Employee Injuries
This is a big misconception. Public liability insurance is designed to cover claims from third parties, like customers or suppliers – not your own employees.
If one of your staff members gets injured on the job, that falls under workers’ compensation insurance, which is mandatory for Australian businesses with employees. Public liability insurance won’t cover their medical bills or lost wages.
Public Liability Insurance Covers Everything
While this type of insurance is essential, it’s not a catch all policy. It won’t cover:
- Damage to your own property
- Injuries to your employees
- Professional errors resulting in financial loss only (that’s what professional indemnity insurance is for)
- Breaches of contract
- Intentional damage or illegal activities
Understanding these limits upfront can save you from nasty surprises when making a claim.
Only High Risk Businesses Need It
Construction sites and tradies definitely need public liability insurance, but they’re not the only ones. Café owners, event organisers, market stallholders, and even personal trainers can face liability risks.
A simple accident – like a customer tripping over a loose rug in a boutique or a spilled drink causing a slip in a restaurant, can lead to expensive legal claims. It’s not just high risk industries that need protection.
Public Liability Insurance is Too Expensive
Many business owners assume they can’t afford public liability insurance, but the cost depends on factors like your industry, business size, and location. Some small businesses pay as little as $30 to $50 a month, which is nothing compared to the thousands or even millions a claim could cost.
It’s an investment in your business’s future. Without it, a single claim could wipe out everything you’ve worked hard to build.
My Business is Safe, So I Don’t Need It
Even businesses that take every precaution can still face unexpected claims. Accidents happen, and if someone takes legal action against you, it can be financially devastating.
Think about this – could your business survive if you had to pay for someone’s medical bills, legal fees, and compensation out of pocket? Public liability insurance gives you peace of mind, so you can focus on running your business instead of worrying about what might go wrong.
Need Cover? Get a Quote Today
No matter the size of your business, public liability insurance can be the difference between staying afloat or shutting down after an unexpected claim. Coverscope Insurance Brokers do the hard work to find the right policy for your business, ensuring you are covered.
