Your Guide to Public Liability Insurance

Public liability insurance is a must-have policy for any business dealing with third parties on a regular basis. From vendors to other companies to clients, anybody can sue you for property damage or bodily injury at any time. So, having a steadfast public liability insurance policy prevents you from paying out-of-pocket for costly claims. 

We understand finding the right insurer can be tricky, so we’re here to help you access the best in the business.

You’ll learn more about public liability insurance, what it covers, and how to get it in the following sections.

 

What Is Public Liability Insurance Coverage?

Public liability insurance, sometimes referred to as commercial general liability insurance or slip-and-fall insurance, protects your business against the daily operational risks of running a business.

Generally speaking, the policy financially protects your business from third-party lawsuits alleging property damage and bodily injury.

 

Real-World Public Liability Claims Examples

For a better understanding of how public liability insurance works to keep your business afloat during otherwise nightmarish situations, take a look at these real-world examples:

 

Example One: Slip and Fall Claim

Your office floor is wet. When your client comes to visit, they slip and fall, spraining their ankle.

They sue your business for bodily injury. Luckily, your public liability insurance policy covers the medical costs and legal fees, equalling $20,000. Without the policy, you would be responsible for paying the $20,000 out of pocket, potentially putting your business into debt and risking permanent closure.

 

Example Two: Bodily Injury Claim

Your chef leaves a sharp knife in the seating area of your restaurant. Unfortunately, a child cuts themselves on the blade.

The child’s parents successfully sue you for bodily injury. Thankfully, your public liability insurance policy covers the medical expenses and legal fees associated with the case, equalling $15,000.

 

Example Three: Property Damage Claim

You’re hired as a painter to apply a fresh coat of paint to your client’s living room. Accidentally, you splash paint on your client’s brand-new carpet.

Rightly so, your client sues you for property damage. Thankfully, you purchased a public liability insurance property that covers the legal fees and carper repair, equalling $10,000.

 

What Does Public Liability Insurance Cover?

While all policies are customizable, most public liability insurance provides coverage for damages and legal costs associated with the following:

  • Tenant’s legal liability — It pays for the repair or replacement of property you rent or occupy for business purposes.
  • Bodily injury liability — This includes property damage and physical harm to a third party or their belongings. Slips and falls are the most common claims.
  • Product liability — If your product causes bodily injury or property damage, your public liability insurance pays for the repairs, legal costs, and medical fees.
  • Personal and advertising injury liability — This includes allegations of false advertising, libel, defamation of character, and slander.

Public liability insurance doesn’t cover your company from every eventuality. So, it’s always a good idea to talk to one of our advisors about a comprehensive policy package. They’ll connect you with an insurer with industry-specific experience to ensure you’re covered in all scenarios.

 

What Doesn’t Public Liability Insurance Cover?

Public liability insurance only covers you for third parties’ accidental property damage and bodily injuries. It will not provide coverage in the following scenarios:

  • Errors and omissions (You need professional liability insurance for this.)
  • Damages to your employees or yourself
  • Contractual liability
  • Intentional criminal acts
  • Personal property (You may need commercial property insurance and/or equipment breakdown insurance.)
  • Products you manufacture, distribute, or sell (You need product liability coverage for this.)
  • Third-party property damage or bodily injury due to alcohol intake (You must acquire a liquor liability insurance policy if you serve alcohol.)

 

How Much Does Public Liability Insurance Coverage Cost?

As a small- to medium-sized business, you should anticipate spending roughly $450 every year on a standard public liability insurance policy with a limit of $2 million.

However, several factors influence the premium price you receive, including:

  • Your years of experience — As you gain knowledge and expertise within your industry, the chances of claiming decrease. So, insurance providers reward you with lower premiums the longer you’ve been in business.
  • Your insurance claims history — If your business has a clean claims record, you will benefit from lower insurance premiums. Conversely, a filled track record results in costlier policies.
  • Your industry — Some businesses carry more risks than others. The riskier you are, the more likely a claim, and therefore, you’ll pay more public liability insurance policies. For example, you should expect to spend more on coverage as a construction worker than a graphic designer.
  • Your annual and projected revenue — There’s no denying that having a high revenue is fantastic for business. However, the only downside is that you’ll have to pay more for insurance. Lawyers will always encourage their clients to request more in compensation if your profitable business can take the hit. Therefore, insurers need to charge you more to level out the increased risk.
  • Your number of employees — As your workforce expands, your business insurance costs may rise. The more people working for your company, the more likely you’ll need to claim on your public liability policy. Therefore, insurance providers must charge more.
  • Your insurer — All brokers and agents have a different appetite for risk, meaning their pricing structures differ too. However, we’ll only connect you with the insurers offering the best value for money!

 

Who Needs Public Liability Insurance Coverage?

Public liability coverage is essential for almost all business owners in Canada. It can cover the costs of unforeseen circumstances like lawsuits arising from third-party property damage or bodily injuries.

As a general rule, you should acquire a public liability insurance policy if:

  • Your clients come to your house or office space.
  • You go to your clients’ homes or office spaces.
  • You or your employees conduct business off-site.

 

Is Public Liability Insurance On Its Own Enough For Complete Protection?

Public liability insurance is often a business’s starting point. It covers the basics, but it doesn’t necessarily provide complete coverage by itself. After all, your company is more than just a slip and fall risk. So, you need a comprehensive insurance package that contains numerous standalone policies to cover the areas left open by public liability insurance.

Based on your business type, you could face a myriad of extra risks. Consider these examples:

  • Your work involves being in high-risk environments, putting staff in danger of becoming sick or injured.
  • You serve alcohol.
  • You rely on a courier company or transport.
  • You have a fleet of business vehicles.
  • You digitally hold sensitive information (such as financial or medical data) and are exposed to cyber events.

Fortunately, various other business insurance types exist to cover such risks, including but not limited to:

  • Commercial property insurance — Commercial building insurance gives you financial coverage for the loss or damage to your business premises and contents if insured disasters (fires, theft, vandalism) occur. It doesn’t matter whether you own or rent the space, the policy is ultra-important as property-related claims can be exorbitantly expensive.
  • Cyber liability insurance — The policy covers the legal and other costs associated with cybercrime that involve your customers’ data or your company’s network. Attacks tend to be expensive, so you should consider this policy if:
    • You use point-of-sale systems.
    • Your store data in the cloud.
    • You offer hardware or software services.
  • Commercial auto insurance — As the name suggests, it protects your work vehicles (e.g., cars, trucks, trailers, and vans). It’s similar to a personal vehicle policy, but it’s more easily customized to multiple employees and occupational hazards. However, the cost still depends on the same aspects, such as your age, gender, vehicle type, annual mileage, and parking location.
  • Liquor liability insurance — If you serve alcohol, you’ll be responsible for injuries or damages that happen when liquor plays a vital role in the issue. There are plenty of liquor liability types. The kind you need depends on how you handle the alcohol, for example:
    • Occupier — Your business possesses alcohol or is responsible for protecting against preventable harm.
    • Server — You’re held liable if you serve people past the point of intoxication.

 

Why Choose LiabilityCover?

We are well-versed in connecting business owners like you to Canada’s leading and licensed insurance brokers and agents. Our unbreakable working relationships mean you can easily access the best rates and policy packages.

We make the insurance world simple and your life easier. Choosing our service means choosing peace of mind. Get started by completing our secure online inquiry form.

 

Frequently Asked Questions

 

Can You Get a One-Day Public Liability Insurance Policy?

If your company is hosting a one-off event (like a fundraiser), you might need insurance for a short duration. In this case, we can connect you with an experience short-term public liability insurance provider for coverage.

Although, if you’re hosting multiple events over an extended timeframe, it’s often more cost-effective to buy insurance that covers the entire duration.

 

What Is The Difference Between Commercial General Liability Insurance and Public Liability Insurance?

In Canada, the terms commercial general liability insurance and public liability insurance are used interchangeably. Therefore, they are the same type of policy!

Public liability is a term most popular in the United Kingdom and the United States of America.

 

Does Public Liability Insurance Provide Coverage for Your Business’s Property?

No, it won’t protect your property. You should consider acquiring a commercial property insurance policy or equipment breakdown coverage to keep your building safe.

 

Why Is Public Liability Insurance So Important?

All provinces’ (except Quebec) common law dictates that you have a duty of care to the public as a business owner. Sadly, accidents happen, and the injured party could claim that:

  • you owe them a duty of care.
  • you breached your duty of care.
  • property damages, bodily injuries, or both occurred because you failed to provide a duty of care.

If any of the above applies, they can pursue legal action for negligence against you and request potentially expensive compensation. A public liability insurance policy will cover all the costs and settlements, meaning you never risk going into debt if a lawsuit occurs.

 

How Much Public Liability Insurance Coverage Do You Need?

The only accurate way to determine the amount of coverage you need is to let our team at LiabilityCover analyze your requirements. We’ll connect you with a broker or agent that has industry-specific experience. They’ll look at every aspect of your company and customize the policies to suit you.

With that said, here’s some basic information on the topic to give you a headstart in the public liability insurance world:

  • Know your business — By understanding your business, you can acquire a rough outline of the coverage amount you should buy. Ask yourself these questions:
    • What type of business do you run?
    • How many employees do you have?
    • Where is your business headquarters?
    • Who are your target market and current customers?
    • How experienced are your employees?
    • Do you have a board of directors?
    • What’s the ownership structure of your business? Are you the sole proprietor?
    • Do you have multiple business locations? If so, where are they situated?
    • At what level does your company operate (i.e., national, international, provincial, etc.)?
  • Customize the regular public liability policy — Once you’re able to answer the questions above, you can more easily tailor the policies to suit you. Some insurers allow you to purchase endorsements (i.e., add-on coverages). They can protect your company from all sorts of eventualities like cyber attacks and liquor liability.
  • Contact us — As we briefly mentioned, you won’t really know the amount of coverage required until you chat with a professional. So, simply fill in our secure online form, and we’ll connect you to the best public liability insurance providers in the country.

 

Does Public Liability Insurance Cover Errors and Omissions?

Public liability insurance doesn’t cover errors and omissions. It only offers coverage for accidental property damage and bodily injuries to third parties.

Professional liability insurance financially protects you from errors and omissions. If your customer sues you for a service you provide, you’ll need a PLI policy to fund the legal and medical fees.

 

 

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