Pursuing a business whether small or large is always a big challenge. Business is filled with huge ups and downs and you never know what challenge it throws on you. You must always be prepared for the worst and make sure that you are ready to face tough times. In business, sometimes you earn money, sometimes you lose, sometimes you are able to satisfy your clients and sometimes not. If your client incurs a loss following your advice and files a claim for compensation, Professional Indemnity Insurance is something that can save you
Indemnity insurance ensures that your client gets the compensation they claim for without any hassle and you as a business doesn’t have to face huge financial setbacks by paying the compensation to the client. It is very obvious that no business would ever want to put their client in loss from their advice but everybody is a human being and there are chances of loss in every advice. You just have to be well prepared for the worst.
Expenses covered under liability insurance
Most of the expenses and claims are covered under the liability insurance which is the reason it is not only popular in Australia but across the world. So many cases have been seen where even the biggest of businesses have collapsed due to huge financial compensation claims by the clients but all thanks to the liability insurance, you are safe and free from worries. Although most of the claims are covered under the insurance, we are discussing some of them below
- Third party bodily injury– If your client gets injured in the accident that involves your business, liability insurance will pay the compensation to your client which includes medical expenses and other legal expenses as well.
- Client’s property damage– If your client’s property gets damaged and your business is involved in that, liability insurance will pay the compensation for the damage or replacement of the client’s property.
- Product liability– If you are a manufacturer and send your products to various locations in your city, country or across different countries, your client who is a receiver of your products can file a compensation for the harm or the damage caused because of your product. In that case, liability insurance will pay the damage to the client as that is covered in the insurance.
- Injuries caused due to advertising– Damages or compensations related to copyright infringements, slander or libel are also covered under liability insurance as all the legal expenses or damages are paid by the insurance company.
Differences between liability insurance and public liability
Public Liability Insurance– One of the most important things about liability insurance is that it is required if the client visits your business premises. In other words, if the client does not visit your office for his work, you do not need to take liability insurance.
The scope of liability insurance is limited so you must be well aware of the limitations before buying it. Also, since it has a limited scope, it is cheap and is well affordable for smaller businesses.
General Liability– General liability insurance is very costly and not only smaller businesses but even mid-sized businesses cannot afford it. Firms that pay for the general liability get much more protection than what liability insurance offers but then it all depends on the requirements of your business.
General liability covers claims and compensations that are filed even off-premises. In other words, even if your client does not visit your office location regularly, you are eligible claim the compensation your client has filed on you
Who needs public liability insurance
If you are a service provider who offers advice, consultation or assistance in various projects to your clients, it becomes absolutely necessary to protect your client’s interests that are related to the services you provide in a legal way. There are many professions in Australia that require liability insurance in a mandatory way and have become an essential and vital part of their business.
Why is liability insurance needed
As discussed previously, liability insurance is needed to save your business from huge financial claims and crises. Financial setbacks are something no business can afford whether it is small, mid-sized or a large business. If your client makes suffers a financial loss and files a claim for compensation, you must be insured so that your insurance company pays the amount on behalf of you saving your business from collapsing.