Commercial Insurance – Why You Need Public Liability Coverage

Public Liability Coverage

Different types of insurance policies are needed to cover different risks businesses face. If the members of public visit your premises, you can face claims when any one of them is injured at your business property. You are liable to pay for the damage or loss of their property. If an accident results in the death of a public member, you have to pay compensation to the dead person’s dependents. Smart Business Insurance public liability coverage covers all such risks. Protect your business with this policy.

What Is Public Liability Coverage?

This liability coverage covers the risks like personal injuries, death, and damage or loss to property. It covers all claims that public makes for accidents at your business place. Nowadays, the insurance industry uses the term general liability insurance in place of public liability coverage for this policy. It covers costs arising from the incidents covered under it. The public member can be a customer, visitor or delivery personal. You can include this coverage under your business owner’s policy. This insurance may be called premises liability insurance as well. It covers all third-party accidents that take place on your business premises.

How Does This Insurance Work?

Most businesses come in contact with the members of public in one way or another. Very few businesses can avoid dealing with the public completely. Businesses that do not deal with the public are responsible for the safety and well-being of only their employees and workers. Most other businesses interact with general public and face the risks of injuries, deaths, and loss or damage of properties of others.

Even when you have placed a warning sign at a vulnerable place on your property, a customer can slip and fall on the wet floor. You could end up with a lawsuit in such a case. This is where this policy will come to your rescue. Simply file your claim with the insurance company and it will cover the legal costs as well as any compensation paid to the affected person. It is important to know that the insurance company will cover only the costs up to the amount this policy covers. The remaining amount must be paid by you.

Risks Covered by the Public Liability Coverage

It covers different types of bodily injuries that a person may suffer at your property. The medical expenses and compensation paid to the claimant are covered under this policy. It will cover third-party property. When a customer’s property is damaged at your place due to your negligence or a mistake by your employee, you are responsible for replacing the damaged or lost item. In such claims, the claimant can also demand payment for the legal expenses. This policy covers that cost as well. All these risks are covered only if the accident happened at your business property. If an accident occurs at your or customer’s home, then this policy does not cover that risk.

The Importance of This Insurance Coverage

You need this coverage to protect your business if you have to deal with public. Unlike other insurance policies that cover unemployment, disability and worker’s compensation, this policy is not required by law for businesses. However, you should have this coverage if you are liable to pay compensation in case of an injury to the public member. It is a limited policy coverage so you may want to consider some alternative coverage. A general liability insurance policy offers that option. It includes coverage for advertising risks. When you are sued for misleading or false advertising, you will be compensated under the general liability coverage. It is a more comprehensive option, but most businesses prefer the limited public liability coverage.

Different Policy Options

Insurance companies offer two different policies for this purpose. A general liability policy is an all-encompassing coverage for businesses. It covers the legal liabilities of bodily injuries, personal injuries and property loss or liability. Being a comprehensive insurance policy, it includes not only the critical risks but also other catastrophic events. Its drawback is that being an extensive coverage, its premiums cost high, making it unsuitable for small businesses. The general liability insurance does not cover professional liability and worker’s compensation claims.

A public liability policy is the second option. It covers injury and property loss or damage. It is suitable for all businesses that deal with general public. The examples include stores where people visit to buy products. This insurance is an economical option to cover the risks that can force your business to go bankrupt in case of a high compensation claim. Its limitation is that it is limited to the public claims. Claims made by the employees, investors and vendors are not covered under this policy. You will need additional insurance coverage to cover those risks. You are also responsible for paying additional expenses not covered by this insurance policy.

Things Not Covered in This Insurance

This policy does not protect you from all claims made by the people. Only the claims made by a member of the public are covered under it. For example, if an employee is injured at your business property, this insurance will not cover the compensation claim. You must have a separate employer liability insurance coverage to cover those claims. You are required to have that coverage if you employ anyone who is not your direct relative. This insurance will also not pay if you yourself are injured at your business property. It will not cover any damage or loss of your property. Only the property of a public member is covered under this policy.

When taking public liability coverage, you should take into account the maximum amount of claim you may face. Compensation claims in serious accidents can run into millions of dollars. Take into account the risks present at your property. You do not need a high level of cover if you operate your business from home and rarely interact with public. However, if you run a store, you will be dealing with a lot more public members. Consult your trade association to understand the right amount of public liability coverage you need for your business. You can also consult an insurance expert specializing in business insurance.