Top 5 Mistakes Businesses Make with Public Liability Insurance

Businesses need insurance and there are many different types of policies. There’s no policy more popular than Public Liability insurance. Regardless of the type of business you have, public liability is one of those policies that companies need to hold and for some industries, it’s even mandatory. 

Public liability insurance is a critical component in your overall insurance plan. This type of policy protects your business if a customer, supplier or member of the public is injured or sustains property damage as a result of negligent business activities.


While it’s a straightforward form of insurance, there are still areas within it that need your extra attention. Save yourself a lot of time and money by avoiding these top 5 mistakes that are made regarding Public Liability insurance.

  1. Failing to disclose everything to the insurer – When meeting with an insurance company or broker, it’s important to tell them everything they should know regarding your work. By simply telling them which business you are in, then answering no to a series of questions regarding possible dangerous work conditions or locations, you could leave yourself and your business vulnerable to gaps in the policy coverage you actually need.

Your obligation of disclosure means that you need to provide the insurer or broker specific details about the kind of work you do, as well as the risks involved. Ask questions regarding what activities would be covered under a standard policy or if there is a more specialised policy that would be needed to provide the best coverage for you.

Why be so specific? If a situation arose where you had to make a claim, it could be possible that the insurer would have to deny the claim because important details about your business were not disclosed and therefore not covered. It’s imperative to get the right kind of insurance policy to cover all potential risks and liability.

  1. Failing to renew your policy and updating any changes to your business – Keeping your policy active and updated is essential. As businesses change and grow, it’s important to review your insurance to ensure that your policies cover any and all changes within your company. Perhaps your staff grew, you’ve taken on addition services to provide, maybe you’re engaging in larger contracts, or changed locations. There are many changes that can happen from the time you initially start your public liability coverage throughout the year.

Although your policy may have been exactly what you needed when first active, make sure your company’s changes are communicated with your insurer or broker as things change. You can then review the policy against the changes and decide if your current policy is still adequate or if you need to modify your policy to cover any changes or additions to your company’s activities. You don’t want to be in a position where you need to file a claim, only to have it denied because the changes were not communicated.

  1. Selecting a policy only based on the price – We all want to get a good deal when purchasing goods or services. Budgeting is very important but don’t select your public liability insurance based on price alone. While there are inexpensive policies out there, they are not all the same. Compare premium pricing but make sure you are clear on what the coverage terms are, too. Consider the quality of the policy, the broker or insurer’s reputation, as well as the price.

By comparing different rates for insurance coverage, you can save money by getting the best pricing for the policies you need. Insurance comparison sites like Bizcover make it easy for you by finding you the best rates for the policies your business needs.

  1. Not understanding the details of the coverage – Public liability insurance seems self-explanatory. The general understanding is that it provides coverage for property damage or personal injury to a third-party person.

The more you know about your policy the better — know what is and isn’t covered. There might even be areas of your coverage that you don’t even realise that you can use for claims that you aren’t aware of. Ensure that your policy covers all your risks and also make sure you are aware of all of the situations that enable you to make a claim.

  1. Not holding a public liability policy – By not having a public liability policy, you are taking the biggest risk of all. It would be a huge mistake not to protect yourself and your business, and possibly puts you personally at risk. Should your work activities result in an injury to another person, you could be liable for hundreds of thousands of dollars possibly even millions of dollars. A single claim against you could bankrupt you and your business.

For example, if you held a $5 million policy with a cost of $400 – $500 a year, it’s a very small price to pay for the peace of mind the insurance can give you. It simply doesn’t make sense not to have business insurance. With public liability insurance, not only are the claims covered but so too are the legal expenses. 

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