How To Ensure You've Got The Right Amount Of Liability Coverage

Businesses in Australia need to have liability insurance to cover damage or injuries that happen in the course of running the business. Without that insurance, businesses could face millions in court penalties and bills if something happened, which could ruin their finances. Ensuring your business has enough coverage means looking both at dollar amounts and types of coverage, as well as knowing exactly when to use it.

Know The Difference Between Public And Personal Liability

You should have two different liability policies, one for public liability and one for personal liability. Public liability covers when you, your staff or something about your business causes injury or damage. For example, you accidentally drop something on a customer's foot, your staff breaks furniture at a client's location when delivering something or someone trips over rough pavement on your business' property are all times when public liability coverage would be used. Personal liability (in this commercial sense) would cover damage or injury done to you, your staff or your property.

Make Sure You Have Enough Coverage Dollarwise

A policy that's in the millions of dollars sounds nice, but it can be woefully inadequate compared to what a court could award someone suing you. Always get more public liability insurance than you think you need. This does mean you'll pay more in premiums, but that will be worth it should you have to use the insurance. If you have to pay out an amount that is more than what your insurance will cover, you're supposed to pay the rest, and that could topple your business dreams. Go for higher amounts of coverage whenever you can; go as high as you can afford.

Double-Check Where And When It Applies

You already know the basics of where and when public liability insurance will apply; now you need specifics. If your staff member damages something accidentally when they are on their lunch break, does your insurance cover it? What about when they're off work for the day but shopping in their work clothes before going home? You won't be able to think of every potential variation, but ask your insurance agent about a few sample scenarios like that to ensure you have a good understanding of what the policy's limits are.

Your insurance agent will walk you through the coverage you need to legally operate in your state as well as what coverage would be a smart addition. You have to protect yourself from lawsuits and the financial damage they can do to your business. Speak to a public liability insurance provider to learn more.