Do You Need Public Liability Insurance for Your New Business?
There are many new business owners that fail to realize the importance of acquiring public liability insurance for their business. Without this cover, the business can incur huge penalties for any damages caused to third parties as a result of the business operations. Public liability insurance is essential for all forms of business that interact with the public, regardless of whether the business is small, medium-sized, or large.
Before taking out public liability insurance, it is important to understand why you should take it and how much of it you need so that you can protect your business in the public sphere.
Why do you need this coverage?
The reason why many businesses don't take up a public liability cover is because the owners don't fully understand the meaning of the term "interaction with the public." You will need this cover if your business undertakes the following:
- If clients and members of the public visit your business to make a consultation, purchase goods or services, or to receive any other type of service.
- If you run a home business and your clients converge at home for meetings and services.
- If your business organizes events that are attended by members of the public.
The public liability insurance covers for any physical, emotional, or mental injuries to third parties and damages caused to property during the course of business operations and transactions. It is not a mandatory cover, but it is essential if your business involves the aforementioned undertakings.
How much coverage do you need?
Determining the ideal coverage will ensure that your business isn't under or over insured. In the case of underinsurance, you will be required to pay for any damages that exceed your cover. If you over insure your business, you will end up paying more than is required to cover the business and third parties. Here are some of the things that determine the ideal coverage for the business.
- The size of the business, where a large business requires more coverage than small ones.
- The types of risk that the third parties may be exposed to in the course of daily business operations.
- The minimum amount of coverage specified in your contract if you are working on a government contract.
Your insurance company should help you calculate the required coverage based on these factors. Once you have determined the suitable coverage, they will inform you of the amount of premiums that you will be required to pay on a monthly or annual basis towards the policy.