One of the most common questions that business owners ask is how much public liability insurance they need.
The answer to this question depends on a few different factors. In this guide we will take a look at some of those factors and how they could affect your needs.
How Much Cover Can I Get?
A public liability insurance policy will generally be available in amounts of $5, $10 and $20 million. Some insurers also offer cover of $15 million however this isn’t too common.
Whilst the cost of your public liability policy will increase if you need more cover, it does not increase proportionately with the amount of cover you need.
For example if you double you cover from $5 to $10 million, the premium will increase but it will not be double. The increase will generally be quite modest, which leads many business owners to take extra cover just to be safe.
How Much Cover Do I Need?
The amount of cover you need will often be decided upon by the other companies that you work with or for. In other cases the cover amount may be set by your licensing requirements.
If you are doing work for schools or government agencies often they will stipulate a minimum amount of $10 million for public liability.
If you are doing work in major shopping complexes or large commercial buildings you will often find that your contract stipulates a minimum of $10 or $20 million.
Some business types will have their minimum cover amount set by their state licensing authority. In most cases this is set at $5 million, which is the minimum amount of cover available anyway.
If the amount of public liability insurance you need has not been stipulated in any contracts or agreements, it is up to you to decide on the amount you need.
Many businesses in this case go with the minimum $5 million cover, but plenty also choose to bump it up to $10 million given that the premium doesn’t increase by a huge amount in most cases.
Generally speaking, if you are working in areas that are widely accessed by the public (such as shopping centres, railway stations and airports) you may need a higher amount of cover. The same goes for work which involves large infrastructure projects.
If you are working on smaller domestic and light commercial projects with limited public access you may be able to get away with less cover, but it’s still a good idea to speak with your insurance broker or adviser first before making any decisions.
I’m Still Unsure About My Needs
Getting your public liability insurance right is important, so if you are unsure about how much public liability insurance you need you should speak with a qualified insurance broker or adviser.
An insurance adviser will be able to assist you with deciding how much cover you should have along with quoting the public liability insurance cost for each different amount of cover.
For more information or to obtain quotes on your public liability insurance needs please contact us or complete our online quote request form.