To answer the question of ‘what are some of the things Public Liability doesn’t cover’, let’s first recap what it would cover. First, legal costs in the defence or settlement. Second, loss or damage of property. Third, compensation for injury. If you are still a little unclear, take a quick read of our blog on what Public Liability Insurance covers. This will take you into more detail.
Keep in mind, all policies are different. What they may not cover depends on the nature of the business. Here are the three main criteria for what Public/ Product Liability Insurance might not apply to:
Primarily, Public Liability would cover loss or damage/ injury against clients/ general public. The nature of this type of insurance is for the benefit of these people. Therefore, employees may not exactly fall under this category due to the nature of who they are in relation to your business. Fortunately, employees can get covered in the case of injury or loss. This is known as workplace compensation insurance. Basically, this type of insurance helps protect your business and your workers from financial difficultly regarding loss/ injury.
It is important to note that there are certain parties who may not be considered as ’employees’. In that case, they may fall under the category of liability insurance. For instance, this may include unpaid workers (such as those doing work experience), students or voluntary workers.
In addition, they may be considered as workers non-specific to your company. In that case, they could be covered under your Public Liability policy, for example as a contractor. However, this may depend on the nature of the job being carried out. Furthermore, a contractor may have taken out their own policy specific to for their line of work. Keep in mind, they may still technically be a third party to you. They could still make a claim against your business. Our advice, speak to the contractor and your broker regarding the policy.
In this scenario, it involves injury, loss or damage as a direct result of what professional advice you may’ve given to a client. If you were a window fitter advising a client to use a specific kind of sealant which later results in damaged windows, you could be liable.
Take another example. An engineer recommends putting diesel into a petrol fuelled vehicle, causing major issues to the inside of the engine. The engineer is likely to be at fault.
Keep note, in both of these examples, the incident must have a direct link to the professional advice given to the client. The right cover for this scenario may be Professional Indemnity Insurance. You can learn more about why it can be a lifesaver for your business by reading our blog on Professional Indemnity Insurance.
Public Liability covers third party damages. The nature of this type of insurance is to rectify damage/ loss or injury as a result of the work carried out. I hate to break it you (if you’ll pardon the pun), but it may not cover repairing the work that’s been poorly carried out.
Here’s an example. A recently fitted bannister in your home breaks loose as you head down the stairs, causing you to trip. You break your leg. In this instance, the carpenter may be liable for breaking your leg but not for replacing the bannister. Technically, the bannister is irrelevant to the public liability claim.
Now that you’ve read this, I trust you have a better idea on what Public Liability Insurance may not cover. The bottom line is that it depends on the policy and the type of business you run. Ultimately, Public Liability Insurance may not cover employees, professional advice or faulty workmanship. However, we recommend getting professional advice on this.
The great news is that FD Beck has a free online insurance quoting tool tailored for contractors, consultants or freelance professionals. In fact, our online calculator has almost 150 professional occupations to choose from. 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.
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