While public liability insurance isn’t compulsory for some business types and sectors, these actual cases may prompt you to consider this cover. And if you have it, ensure you review it regularly to better fit your business needs.

At the crux of public liability is negligence. You could be liable if your business has failed to take reasonable care in your day-to-day operations. If your negligence leads to injury or death of a person, or damage to or loss of another person’s property, then a customer or member of the public could make a claim. Your business could be out of pocket for the legal costs to defend a claim, and you may have to compensate the affected third party and pay their legal costs.

The latest figures from the Australian Prudential Regulation Authority (APRA) – for the 2021 underwriting (calendar) year – show a 15% increase in public and product liability claim payouts.

Increasingly, there is the potential for significant damages to be awarded, says the Australian Small Business and Family Enterprise Ombudsman Kate Carnell. In short, the chance of being sued for negligence can be unpredictable and expensive. However, the more common injuries include back and neck injuries as a result of slips, trips and falls.

Sorting out slip, trip, and fall hazards

A major public liability risk to businesses concerns visitors to your site slipping, tripping, or falling. Here are details of successful claims made against businesses in Australia:

  • A man visiting his local club slipped on a large puddle of water in the men’s room. He fell and injured his shoulder, had surgery, but didn’t regain full use. He reached an out-of-court settlement with the club.
  • A woman fell due to an uncovered stormwater drain, injuring her knee and ankle, but it became infected and caused ongoing knee pain. She could no longer enjoy an active lifestyle and had to change careers. A negotiated settlement helped her take on a more suitable job.
  • A self-employed long-haul truck driver stepped out of his truck at a weighbridge where the lights weren’t working. In the pitch dark, he rolled his ankle in a pothole and suffered a serious and enduring ankle injury making it painful to use the clutch on his 18-gear vehicle. The owner of the premises paid him a significant compensation sum.

Building and construction failures

While the building and construction industry ranks among the most dangerous for workers, these sites also present public liability issues for customers and the general public. Read about these successful claims:

  • A building insurance company had to compensate a pregnant woman who suffered several injuries after a heavy fence around a building site fell on her.
  • A man was awarded a significant sum after suffering paraplegia when he fell through the roof while clearing the gutters on his girlfriend’s rented property.
  • A self-employed truck driver’s claim against a tip was settled out of court after he rolled his truck, suffering very severe physical injuries due to ground subsidence.

Managing your public liability risk

The law requires you to take reasonable steps to ensure the safety of your customers, suppliers, community members, and their property when you run a business. Taking those steps and investing in public liability insurance can give you peace of mind to protect your business against claims. Reasonable steps should be outlined in a risk management program and could include inspecting and cleaning public areas, staff training and maintenance programs.

For small businesses and family enterprises, it can be difficult to secure public liability insurance, according to the Australian Small Business Family Enterprise Ombudsman, Kate Carnell. That’s why, whether you represent an SME or larger company, it’s good to talk to us. We can help you can access discounts on premiums, such as through bundling different policies into a package. Whether public liability insurance is compulsory or not for your type of business, it’s definitely worth looking into so you’re better protected from increasing risks.