Public Liability Insurance for Construction Contractors in Australia
Many things can go wrong in the construction business. For instance, heavy equipment can damage public or private property. Similarly, heavy machinery can lead to injury or death of a passerby. Therefore, construction contractors need to take an insurance cover to protect the business against such risks. A public liability policy protects a business against the risk of death or injury. Also, public liability insurance safeguards against the risk of causing damage to a third party property. Here is a useful guide about public liability insurance options for construction contractors in Australia.
1. Why You Need Public Liability Insurance
If you run a construction business, you may be liable in case of injuries, deaths, or even damage to another person's property. Australian law allows people to sue businesses on the grounds of negligence through public liability charges. Therefore, since a construction business is a high-risk venture, you should take public liability insurance to protect your company in case of a legal challenge. Besides, the cover can save your business thousands of dollars in compensation and legal costs in case of property damage, personal injury, or death.
2. Compulsory or Optional?
In Australia, there is no legal requirement for a business to have public liability insurance. However, since the construction sector is highly regulated, you need to cover your business with public liability insurance to be licenced in most jurisdictions. Besides, shrewd clients need proof of cover before hiring you. Remember that even if it is not mandatory for your business to take public liability insurance, having one gives you the much-needed peace of mind knowing that you have shielded your business from huge financial risks.
3. Cost of Public Liability Insurance
The type and size of your company are the most common factors that affect the cost of public liability insurance. For a small construction contracting company, a $5 million cover may entail paying an annual premium of $500. Ensure that the total amount for a public liability policy is adequate for your business needs, especially if it is bundled with other insurance products. The reason is that some insurers may cause you to pay minimal premiums by incorporating a small percentage of public liability insurance in the insurance package offered to you. Many contractual agreements set the minimum amount of public liability insurance, usually $5 million. However, other contracts set a higher amount ranging from $10 to $20 million.