We’re sure many business owners have already experienced an insurance-related headache after having the words “liability”, “indemnity” and “insurance” thrown at them. There are so many different types of insurance that sometimes it can become confusing what each one is for. To help relieve your headache and take some confusion out of liability insurance we have put together a short explainer about the terms and why they’re important to business owners.
Liability insurance protects your business from financial loss if your negligence, your actions or the condition of your property are found to have caused; injury or death to someone, their property to be damaged or destroyed, or they suffer loss as a result of trusting your services or advice.
With liability insurance, the financial loss that you are being protected from is:
- The legal costs of defending a claim against your business, and
- The compensation that you may be required to pay if the claim against you is upheld.
Liability insurance exists in three forms: public liability, professional indemnity and product liability.
With public liability insurance you are covering people, contractors, a business or an event hosted by you for costs from legal action where you (or those mentioned) are found liable for death or injury, loss or damage of property, or negligence resulting in economic loss.
When you own a business, you know that not everything goes according to plan and accidents can occur. For example, a customer might trip in your warehouse and break their arm. Being sued for negligence is the last thing your business needs, so public liability insurance is recommended for all businesses, regardless of industry.
Be warned that your public liability insurance most likely won’t cover you if you’re involved in hazardous or criminal activities. For further information on this, contact McKenzie Ross, public liability insurance brokers Melbourne.
If your business provides professional services or advice, then professional indemnity insurance will cover you. If someone suffers a loss or damage as a result of using your services or following the professional advice you give to them, professional indemnity insurance will protect you from legal action that may be taken against you.
Professional indemnity insurance can be applied to a number of different professions, from the medical field all the way through to finance. For example, a chiropractor adjusts a client’s spine and causes an injury, or a financial advisor provides advice that is ill-fitting for the client resulting in major financial loss. Both are examples of situations where professional indemnity insurance could apply.
At McKenzie Ross, we provide combined public liability and professional indemnity insurance.
If you are a business that manufactures, sells, distributes or imports products into Australia, then product liability insurance is for you. Product liability insurance covers action taken against you by consumers who experience damage or injury that they believe was caused by your product.
Unfortunately, action can often be taken without the customer having to prove it was intentional or negligent on your behalf. Investing in insurance is a sound way to get ahead of this threat to your business.
McKenzie Ross are experienced professional liability practitioners who can provide you with a comprehensive review of your Professional Liability exposure and provide a tailored insurance solution to suit your needs. Call us today on 03 9691 2222 to book a consultation.