Public liability insurance

Some claims belong to other policies. An employee hurt at work falls first to workers' compensation. A client's financial loss from your advice or service is professional indemnity, and public liability and professional indemnity sets the two side by side. If you own the building, check how your liability as its owner is covered. Many liability policies include premises you own, and property owners liability covers it on its own. Owners can start with insurance for commercial property owners.

Public liability generally responds to injury or damage that happens while the policy is in force, not to the date the claim arrives. If it happened while you were insured, a claim that comes later can still be covered, even after you close, retire or move on. Injury or damage from your past work or products that first happens after the policy ends falls outside it.

The cover is written around the work you tell the insurer you do, so your insurer needs an accurate picture of that work. If an activity is missing from the business description, the cover may not fit it. With a broker, you tell us every activity your business does, and with the full picture we go and find a policy that fits that work.

Only if it is written for the work you do. Two policies with the same limit can cover very different jobs, and these are the gaps we see:

• Extra terms added to the policy that take away cover your kind of work needs.
• Limits on height, underground or external work that you may not notice or understand, leaving that work with no cover.
• Limits on cover when someone working for you is injured.
• Whole industries shut out, such as airports, marine ports, public utilities or mines, so one job at an airport is uninsured.
• Exclusions for a product that fails to do its job, which cut away your product cover.

Public liability exclusions by trade lists what a trade's policy can leave out.

A customer's machine on your bench is property in your care. Damage to it is generally excluded, then partly covered again up to a set amount. Across the 17 general liability wordings we compared, that amount runs from $100,000 to $500,000 a claim unless your policy schedule, the pages that set out your own cover, sets a different figure. On some of them it is also the most the policy pays in the year, so an earlier claim leaves less for the next. Some cover none of it. One gives it only where you accepted liability for the property, and many exclude the part you are working on. Anything above that amount is yours to pay, so we check it against what you look after.

Standalone public liability, called general liability, is usually bought for higher-risk work or bigger turnovers. Otherwise public liability usually comes as one section of a business pack, a packaged policy covering several risks at once. Standalone general liability is generally priced by hand. An underwriter, the person at an insurer or an underwriting agency who decides whether to take a risk on and at what price, works from the details a broker sends. That is why you cannot buy general liability insurance online.

Most commercial leases and a lot of trade contracts carry an indemnity clause. It is your promise to cover the landlord or the other party for anything connected with your being there, sometimes including things that were not your fault. Most policies exclude liability you take on only because you signed a contract.

Someone hurt at your premises still sues you as the business they dealt with. Public liability generally responds to that claim, subject to its terms, whoever is ultimately to blame.

A head contract is the main contract on a construction job. Its insurance schedule almost always asks for at least $20 million of public liability now. Work under someone else's contract is contractor public liability insurance. We ask to see any tender that comes with insurance conditions. We are not licensed to give legal advice, so a head contract can go to a no-fee contract review service for a lawyer's basic advice.

When a landlord or a builder wants proof before you start, they ask for a certificate of currency. It means your policy is paid and current until its expiry date, and we release yours once we have received your premium. What else a lease can ask you to insure is on insurance for business tenants.

A contractor's own public liability covers claims made against them. If their cover is missing or has lapsed, or the work was passed down the line to someone uninsured, the claim can land on you. Ask for their certificate of currency before work starts.

Being self-employed doesn't take a subcontractor outside your duty of care. Send one onto an unsafe site and you can be liable, at least in part, whatever ABN is on the invoice.

A contractor can still count as your worker under workers' compensation law. For a contractor who is not your worker, an injury while working under your direction becomes a personal injury claim on the business's public liability. Those claims are costly. Insurers ask what you pay subcontractors mainly to price that risk. The figure you declare commonly decides your cover when one of them is hurt, and on many policies it is what switches that cover on. It adds no cover for damage they do to other people or their property. Give the real figure when you apply, and update it during the year if you take a subcontractor on.

Is a contractor hurt at your premises your public liability problem?

Often yours, through your public liability policy. A contractor who had provided services at a Queensland engineering business for about two years slipped on a spill in its yard. By their own account they had no injury cover of their own, so the only cover within reach was the business's public liability policy.

Because we lodged the claim properly the moment a legal demand arrived, the insurer agreed the policy applies. It appointed specialist lawyers to defend the claim at its own cost, looking into the spill, the contractor relationship and the medical link.

If contractors, cleaners or delivery people work at your premises, settle whether they are contractors or employees, and how your cover treats their injuries, before someone slips.

What excess applies if a subcontractor is injured on my site?

Often a much higher one than you expect. Many liability policies carry a standard excess for most claims and a separate, larger one for injury to anyone engaged to work on your site. For a Brisbane residential building company, we flagged a $10,000 subcontractor injury excess before the insurer confirmed it. The full story is in If a subcontractor is hurt on your job, can you be held liable?

When a customer or a contractor says your business is to blame for their injury or damage, the claim comes to us on a policy we look after. Our specialist claims manager runs it with the insurer, follows up delays and challenges a decision where the policy and the evidence support a different outcome. The broker who looks after your cover stays on it with them, so someone who knows your work still knows where the claim stands. We explain each step, and you are not left reading the insurer's letters alone.