Public Liability Insurance
Public Liability Insurance. Have you ever had someone trip, fall and hurt themselves in your office or showroom? Have you ever accidentally damaged someone else's property while out on a job? If you have ever found yourself in the awkward position of having accidentally caused someone else a loss or injury in the course of running your business, then you can to appreciate how valuable public liability insurance coverage is.
Understanding public liability insurance is vital to protect your business from lawsuits for bodily injury or property damage. Learn how a PL policy can shield your business from real or frivolous claims.
What Is Public Liability Insurance?
This is a type of insurance that covers you and your company against the legal costs of a claim should customers, suppliers or even members of the public get injured or suffer a loss while you're providing a service, either at your work place or at another location. A PL insurance claim is usually brought by the other party. The person suing must show that their loss or injury was a fault of the organization they are suing.
Having public liability insurance is important because even when a business does everything right there's always the chance of an accident happening. With this insurance coverage in place, a business operates knowing that even after the worst happens, their customers' property will be replaced or repaired and their medical costs covered.
Who Needs Public Liability Insurance
Even the safest business runs the risk of causing injuries or damages in the course of its operation. And you do not want to be left with empty pockets just because you saved a bit of money by not buying Public Liability insurance. You should consider public liability coverage if:
- You own business premises that members of the public, customers or clients visit.
- Your business organizes off-site events or activities that are attended by members of the public.
- You run a business from your home and people visit your home for professional purposes.
What Are They Most Common Public Liability Claims?
The most common occurs when a visitor to your premises has hurt themselves, usually by slipping and falling or tripping, and they believe that your negligence was the direct cause of their accident. Public liability claims also commonly arise when a visitor's property is lost or damaged while on your premises.
It is important to note that the policy coverages are based on your class of business (the type of work you do). So if your line of business is not clear or you are doing an activity outside what your occupation is stated, then their is a good chance you won't be be covered.
Is Public Liability Insurance Mandatory?
No. Public liability insurance isn't mandatory by law. While PL coverage is not a compulsory legal requirement for some businesses, it should be considered essential if the members of the public will be interacting with your company in any way - from customers receiving deliveries to clients visiting your office or work premises.
It is often required by contract by a client or as by a general contractor hiring your business as a sub-contractor; or a homeowner hiring you to do work on their home. It is also common for municipalities to require you to have it to get a contractor license.
How Much Coverage Do I Need?
It's upon you to decide how much public liability insurance you need, although it's sensible to check with your potential clients to see if they expect a particular level of coverage. The most common public liability insurance policy is for 1 million per claim, 2 million aggregate limits.
Another way to determine how much PL coverage you need is consider what you do and what damage you could do (accidentally, of course). Think about worst-case scenario, your work environment, and what could really go wrong. Public liability claims could be expensive, and even when you're not the one at fault, you could still incur substantial legal costs when defending yourself.
How Much Does Public Liability Insurance Cost?
Premiums usually depend on your business type and are usually rated from zip code and gross sales or payroll - though more factors could be used. Your premium may also vary depending on policy limits, endorsements and claims history.
Accidents do happen, from time to time. That's the nature of running a business. Having public liability insurance in place helps set your mind at rest, keeping you covered if a customer or member of the public suffers a loss or injury because of your business.
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Get useful tips and information about how much commercial insurance costs, small business risks and exposures, how insurance regulations effect your businesses' and detailed descriptions of coverages and exclusions and more. Most small businesses need to buy the following four types of insurance at a minimum to cover their operations from every day risks:
Property Insurance: This policy covers a business if the property used in the business is damaged or stolen as the result of common perils like fire or theft. Commercial property insurance covers the buildings, structures and also business personal property - which includes furniture, inventory, raw materials, machinery, computers and other items.
Liability Insurance: Any company can be sued. Slip-and fall lawsuits are very common and be costly. Customers can claim you injured them or damaged their property - and lawsuits are very expensive. Commercial liability insurance pays damages and can include attorney's fees and other legal expenses. It also ca pay for the medical bills of injured third parties
Commercial Auto Insurance: For vehicles owned by the business. Commercial auto insurance pays bodily injury or property damage costs for which the business is found liable - up the the policy limits for liability and property damage.
Workers Compensation Insurance: In almost every state employers must provide workers comp when there are W2 employees. Workers compensation pays for the medical care of employees and can replace a portion of lost wages - regardless of who was at fault for the injuries.