Basically, Public or Product Liability Insurance is your first line of defence from financial loss. It should protect you against negligence that may injure a person or damage their property. Although, there is a key question that many ask. Is Public Liability different from Product Liability? Yes and no. Both provide cover due to personal or property damage that you may’ve caused. However, there are distinctions. In this blog, we’ll help you understand the difference.
Firstly, Product Liability is associated with the business product. Secondly, it applies if you may have caused injury or damage with products that your business might’ve supplied, manufactured, imported or installed. The examples below may help paint a better picture for you:
You’re an alarm installer. You install a smoke alarm for a client. One night, a fire starts in their home whilst in the house. This causes major structural damage around the kitchen. The fire alarm does not go off to warn them. They claim the alarm wasn’t installed correctly. This is down to the installer. Therefore, you may be liable for damages.
You’re a car manufacturer. A client buys a brand new car that you’ve manufactured from new. Within a couple days of driving, the front left wheel comes loose. The car swerves and crashes. The driver ends up breaking their arm. It turns out one of the bolts wasn’t fitted correctly onto the wheel. Ultimately, this product caused injury to the client. Plus, the car is damaged. You may be liable for damages.
Similarly to Product, Public Liability can cover claims for injury or property damage/ and loss. However, the difference here is that injury or damage isn’t caused directly by a product.
Basically, Public Liability Insurance is associated with more intangible accidents. Accidents that aren’t directly linked with a product or service. Therefore, it can be unpredictable. In addition to this, it’s now become mandatory for public events and service based industries to obtain Public Liability Insurance. Also, even if you take the right steps to prevent injury/ damage, nobody can be certain that something won’t go wrong.
Let’s take Sally’s example in the video. A customer slips on something that’s been spilt on the floor. In this instance, there may have been negligence towards maintaining floor safety on the premises. In this scenario, the correct measures should’ve been put in place to ensure public safety. For instance, a warning sign. Without the correct measures, the victim is likely to make a successful claim providing they incurred loss or injury in some way.
In conclusion, both product and public liability insurance are able to protect you from negligence and fault claims. However, the distinction is that product is more associated with product manufacturing and supplying. In any case, it’s worth checking what your business can and should be covered for by speaking to an expert.
Unsure who needs public liability insurance? Don’t worry. We’ve got a helpful blog for that! Read our Blog “Who needs Public Liability Insurance?” and then call us if you still need support. It is important to get personalised advice from an insurance expert. To find out more about how your business can benefit from Public or Product Liability Insurance, speak to us! Let us discuss your insurance needs and what may cover you.
For your convenience, FD Beck has a free online insurance quoting tool tailored for contractors, consultants and freelance professionals. Our online calculator has almost 150 professional occupations to choose from. What’s handy, is that FD Beck’s online PI insurance calculator offers limits options of $500,000, $1,000,000, $2,000,000 and $5,000,000. Better still, our online calculator includes other products such as Public Liability and Cyber Insurance. That’s just to name a few.
For over 100 years, FD Beck has protected Australians. Rest assured, we have the knowledge and expertise to handle every aspect of your insurance needs.