As A Sole Trader It Is Really Worth Me Getting Public Liability Insurance?
What is Public Liability Insurance?
Public liability insurance protects companies from lawsuits or claims that may occur while of the owner’s premises. These claims may arise from visitors, trespassers, sub-contractors and any other members of the public. It is within the organization’s best interest to protect themselves from untimely lawsuits that may cause the entire organization to declare bankruptcy.
Is this Insurance Required by Law?
The legal requirement of public liability insurance varies from state to state. Regardless of the requirement by law, most companies recognize the importance of the company to obtain insurance. Most organizations will include this type of insurance as a part of their insurance portfolio. One type of public liability insurance may include pollution insurance. This insurance ensures that expenses related to lawsuits involving environmental accidents.
What Types of Businesses Need Public Liability Insurance?
Public liability insurance is encouraged in all businesses. However, many small businesses do not obtain this type of insurance because of high premium costs. Companies may suffer out-of-pocket expenses that would be more than paying monthly premium costs. If the lawsuit is large enough, the company could completely shut down.
How Much Insurance Coverage is Required
Businesses must decide how much coverage is appropriate and what insurance is cost-effective. Companies with the greatest risk of lawsuits are shopping malls, clubs, theatres, sporting venues, hotels, markets and resorts. The risk of a lawsuit increases in places like night clubs and sporting venues where alcohol is present. Industries such as cleaning and security are considered high risk for lawsuits. These companies may be insured; however, the deductibles may be high. Some insurance companies may not cover these companies even with a high deductible.
When are Companies at Risk for Being Sued?
In most instances, insurance companies are only at risk of being sued by another party for negligent behaviour. Those that manufacture product are also at high risk. Public liability policies will provide money to pay to injured parties if they are on the job. The amount offered depends upon the policy amount. In some instances, this may be as high as $1 million or more. This amount will cover the cost of the customers or the clients.
What Type of Negligence May Occur?
Examples of claims that receive compensation for negligent behaviour vary significantly. For instance, the company may cover the cost of water damage to carpet, furniture or computer if a pipe bursts from negligence caused by their company. Alternatively, a company may cover the costs of a slip and fall down a flight of stairs at a sporting event. The steps may have been freshly mopped with no sign-age available. Any of these events could result in major lawsuits causing the company to lose millions.
What does Public Liability Insurance Cover?
Public liability insurance will pay the claimant in full with no out-of-pocket expenses for attorneys, research and other major expenses. This helps companies remain profitable and viable despite any settlement that result from the case.
Those members that work from home should consider public liability insurance to avoid losing the home to a major lawsuit. The insurance will cover the same legal fees, costs, expenses and other hospital treatments even in the home. Premiums will be calculated based upon the size of the home and the level of activity that occurs within the company. Nearly every establishment, even a hotel can benefit from this particular type of insurance. Many customers will require viewing a copy of this insurance before doing business with someone else.
There are all sorts of liability insurances that cover a variety of legal expenses related to negligence. Clients should shop around for the best rates in order to help them find the best deal. Public liability insurance is worth the expense. Think of the millions saved in legal fees and settlements should an accident due to negligence occur. Without this type protection, companies can lose all of their revenue through a single accident.