Insurance policies are designed to cover a wide range of situations. Public liability insurance policies cover a business if someone sustains injuries or property is damaged as a result of the business activities of the firm. Any slight damage to the property of a third party may result in heavy fines, as well as legal fees if the case proceeds to a court of law.
When this happens, the public liability policy will cover all these costs. For all the benefits associated with this insurance policy, there are also many myths.
Myth #1: It is mandatory to buy the insurance cover
The law does not require that businesses purchase public liability insurance. However, if you want to protect your business against paying huge amounts of money on claims, it would be important to purchase this policy. You employees may cause injuries or damage property belonging to a third party while carrying out their work. This insurance policy is important for businesses that work in public spaces or on customer’s premises. If you’re unsure about the costs of this, get a public liability insurance quote first.
Public liability insurance will still be helpful even when you meet customers in your office or home. In case a customer or any other third party sustains injuries while in your premises and consider you to be liable, they may file claims against your business. The insurance policy will cover you against such claims.
Myth #2: You can just shut down the business if you get sued
If you run a small business, shutting it down when you are found legally liable for injuries and damage to property will not make the case go away. When there are claims made against a small business, the sole trader will have unlimited personal liability attached to them. While it is possible for those who run a limited company to shut down their business, they will still have to handle the lawsuits against their business. Only a public liability insurance policy can help in such cases.
Although shutting down the business could be seen as an easy option, following the harder path will help to minimise the damage. Insurance is designed to make it easy for business owners by meeting the costs of such claims.
Myth #3: Public liability Insurance covers financial loss
This is not entirely true. Pure financial loss is not covered under public liability insurance. A third party cannot, therefore, seek compensation for the financial loss they have suffered as a result of the actions of a service provider.
Myth #4: Cover is provided for professional services and advice
Public liability insurance is often confused with professional indemnity insurance. While Professional Indemnity is designed to cover against claims resulting from professional negligence in business services and advice, public liability meets the costs associated with accidental damage and injuries. It is important to understand the difference between the two policies so as to ensure that your business is covered correctly.
Public liability will cover a situation where a plumber is required to replace a pipe that was damaged when repairs were being done on another leaking pipe. Professional indemnity will be relevant where a plumber had installed plumbing systems, but the client needs them to be rectified since the system does not serve the bathroom as expected. The costs resulting from the rectification will be covered under Professional Indemnity.
You will need new insurance for every new contract
In most cases, businesses will only need to purchase a single policy that covers all the contracts and projects that the business undertakes. It may only be necessary to purchase new insurance instead renewing insurance policy when the new contract is extremely complex, involves high risks or is large. Most of the public liability insurance policies are designed to be flexible. This makes it easy to add more features as the business grows or takes on new projects. This will not only be convenient but will also ensure that your business needs are met.
When looking for insurance policies to protect your small business, it is important to work with reliable and reputable insurance companies. Self-employed public liability insurance can be of great benefit to your company.