Public Liability – What is it?

Aug 29, 2016
Reading Time: 2 minutes
Written by Richard Yuen

Are you the owner of a small business that sells burgers at food truck events? Or maybe you create gourmet pizzas for a living? If you are a small business owner that interacts with customers and suppliers on a regular basis, your business may be liable for any damage caused to them or their property.

What is Public Liability?

Public liability is your business’s responsibility to ensure that your business does not injure or damage to third parties, such as customers and suppliers, when selling goods or services.

If you regularly interact with people outside of your business, you should consider your public liability obligations, and consider taking out public liability insurance so that you are protected against personal injury or damage to property compensation claims.

What is Public Liability Insurance?

Public liability insurance protects your business against claims made against your business from injury or damage caused by your activities. This only applies for losses suffered by a third party, so it does not cover claims made by employees or staff members.

This form of insurance applies for all claims against your business or staff members for:

  1. Damage to property; or
  2. Personal injury to a third party.

Public liability insurance also often includes product liability insurance, which covers your business for claims made against you that arise from damage caused by goods or services that you sell through your business.

Examples of when product liability insurance can protect you:

  • Illness caused by a packaged beverage you sell;
  • Injury caused by gym equipment you lend out;
  • Injury caused by faulty wiring in an electronic good you sell;
  • Injury caused by incomplete service of a tabl or chair.

Why should I take out Public Liability Insurance?

As a small business, you have a duty of care to all customers, suppliers, and other such third parties to ensure that you do not cause any damage or harm to them when you conduct business. If someone takes out a public liability case against your business, the resulting legal costs and payouts can severely hinder your business.

Public liability insurance may seem costly, but it is a necessary part of protecting your small business from surmounting legal costs and damages. If you are concerned about your duties to third parties or are considering taking out public liability insurance, LawPath recommends getting in touch with a commercial lawyer to explore your options in protecting your business.

Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

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