If you run your own business and you employ staff to carry out work on your behalf, it's important that your company has liability insurance. This type of insurance is essential for employers as it provides you with protection should injury or accident occur as a result of the actions of one of your workers. Here's a brief guide to liability insurance to help you understand what cover you need for your business.
What does liability insurance cover you for?
Professional liability insurance is applicable to businesses that offer personal and professional services and provides cover against claims from other businesses and clients. For example, if you run a carpet cleaning business, you should have professional liability insurance in the event that a client claims against you for shrinking or damaging a valuable carpet during the cleaning process.
Certificate of liability insurance
You should discuss your company's liability insurance requirements with your commercial insurance broker. They will be able to advise you as to which type of policy would suit you best, depending on the nature and size of your business.
When you take out liability insurance, you will be issued with a simple, one page certificate. You should have the certificate framed and put on display in a prominent place in your business premises, so that staff and visitors can clearly see that you have in place the liability insurance that you claim to have. The certificate will show the type of coverage that you have, its limits, the insurance company, the policy number, the date on which the policy began and the date on which it ends, and the name of the insured.
The purpose of the certificate of liability insurance
The certificate of liability insurance is important because you may need it in order to secure new business contracts. Potential clients can clearly see that your business is fully-insured, meaning that if work carried out by you or your employees is substandard, or damage or injury occurs, they won't be held liable.
In some cases, a subcontractor may request that their name is added to your certificate of liability insurance as a certificate holder. Although this request does not provide them with any legal claim on your own insurance, it just indicates to potential clients that your 'subbies' are covered too under their own policy. Naturally, you should ask to see proof that such requests are backed-up by insurance documentation pertaining to the subcontractor's own business.
If you run your own business and employ staff, you should have liability insurance in place to protect you from claims against your company by clients or other companies. Discuss your requirements in detail with your commercial insurance broker (like Westralian Insurance) to ensure that you have the right liability cover in place.