Public and Products Liability
Are You Correctly covering Your Business Services or Products from Litigation?
Most small businesses are time poor and regularly fall into an insurance void where inexperience and lack of knowledge create an insurance program which doesn’t respond to your particular circumstances.
Don’t opt for a public liability policy only as although it usually covers you for your business activities within Australia at home, expo’s, banking etc; it will rarely cover any professional negligence, products liability or cyber liability exposures. Public and Products Liability policies differ in the type and amount of coverage given, so careful consideration should be given to disclosing all of your business activities to ensure that the correct cover is arranged.
What Countries do you operate in?
Understanding what your business activities are and also what percentage of your business relates to each activity is paramount in not only getting your liability program correct but also in ensuring the policy is rated correctly and the relevant policy extensions put in place to protect you against litigation.
What Jurisdiction are your Contracts governed by?
Most businesses enter into contracts for any number of reasons: supplier contracts, leases, importing agreements etc. In each case you may be signing away your legal rights and detriment or void your liability policy protection. You may also be entering into an agreement which sees you going to court in another country or state rather than from where you operate your business.
Are You Importing?
The current legal situation is that if you import the products directly from the manufacturer (and not via an agent or manufacturers agent) you are deemed to be the manufacturer under Australia law making you liable for product in both professional negligence and public/products liability exposures. Inversely if you are Exporting there are a number of considerations that need to be taken into account to ensure that you have the correct policy coverage in place.
Are You Drop-shipping?
Drop-shipping is a great way to remove storage risks and additional handling. From an insurance perspective it still requires clarification as to who is the manufacturer, where are items coming from and to and if any white labels or other services are offered (e.g. goods insurance)
Are You Re-labling?
If you alter the product in any way including packaging, decanting, mixing etc you require your Products Liability policy to be correctly structured. Don’t rely on “the insurer will know what I do” as quite frankly they don’t. They have an image of the risk and base it on what information they have to make their decisions.
Liability Claims are Long-Tailed?
With regards to sums insured, we do not write policies with a limit of less than $10,000,000 due to recent claim payouts and also the ability for long tailed claims to seriously erode the sum insured as the policy responds to the sum insured at the time of the loss not at the time of litigation or payout. E.g. a lag of up to 5-7 years can exist from the time of claim to the time of payment.
5 Critical Reasons to Structure Your Public & Products Liability Policy Correctly
- Understanding what Jurisdiction claims will be bought against you and what law applies to your products and services?
- Avoiding gaps in cover which may result of activities such as Drop-shipping, re-labeling, Decanting, Mixing etc.
- Understanding how the policy limits for public and products liability are different and how they respond to claims.
- Clarifying if you are considered a Manufacturer under Australia Law or just a distributor or retailer.
- Set the boundaries between this cover and other liability policies and how they fit into your Insurance Program.
As you can see this area is one where a competent and experienced insurance broker can assist you and your business in ensuring that your Risk Management and Public and Products Liability insurance program responds accurately and quickly to any potential claim. There is so much more information we can cover here.
Our approach at Insuring theProduct is to fully review your business structure, operations and risk management to custom design an insurance program with you for your small business and then implement the program to work with your business risk management.
Nothing can replace professional expertise advice from an experienced Specialist Insurance Broker.
To arrange a full discussion and quotation on Public and Products Insurance and how to protect your business contact us Today on 07 5313 7871 or complete the short form below.
We serve Kunda Park, Currimundi, Sippy Downs and all areas in the Sunshine Coast and Brisbane, QLD.