Though not legally mandatory, having a public liability policy is a worthwhile insurance expense. As long as you are in contact with the public, as explained below, you should consider applying for this type of insurance.
Anyone whose business involves interacting with clients or customers should not assume the importance of public liability insurance. Unforeseen damages are prone to occur with such interactions which might end up draining your personal finances if you are not covered. A customer may get burnt at a salon or slip and fall because of a wet floor leading to organ damages. Such events will call for claims for compensation which you need to have the ability to cover.
This type of insurance cover in Australia can be quite high since some of the risks it covers include replacement costs, injured party’s repairs, loss of income and medical fees. The bigger the business, the more you will need to pay for your cover. This is because a more significant company deals with more customers, so in the event that a risk affects several parties, the business needs to be at a place to comfortably settle all claims.
If taken before the court for public liability claims, the court will consider the extent of the risk occurred and seriousness of its damages, what it takes to prevent a type of risk from occurring and social utilities creating the risk. The court will then determine the level of compensation required as per the findings.
Some risks covered in public liability policies could be life-threatening or cause permanent damages such as crippling the affected party. On the other hand, claims can also be high enough to drive an SME into bankruptcy. This is why, if your business premise receives members of the public or you organize events that involve public attendance, you need a public liability policy.