Received a call from a prospect Mr X few weeks ago who wished to get a quote for a “simple” Public Liability plan.
Upon probing, he revealed that it is a specified requirement in a project the firm is tendering for. I asked for the details.
I received the documents few days later. The firm needs to provide a General Liability cover and not just a Public Liability plan among other requirements. Fortunately, he did not just apply for an off-the-shelf quote because it may not be adequate, and in most instances business owners learn about it the hard way.
“Got difference meh?” is a common question asked about these two terms.
Both are liability coverage, designed to cover the policy holder’s legal responsibilities in incidents or events covered by the policy.
Public Liability: designed to protect business owners against losses associated with injury, property loss/damage incurred by members of the public and/or third parties while on the business premises. It is a basic cover required by landlords, especially for those companies that are retail or public access oriented. For example, a client visiting your premise may slip on a wet floor, suffer an injury, and take legal action against you.
General Liability: It is a broader (thus costs more) cover protecting the business owners for broad range of potential legal issues. It may be designed to protect against liabilities arising from defective products, bodily injury or property damage incurred on the premise or as a result of their business operations off premise.
Despite its wide cover, below are some risks it will not cover:
Note that General Liability may exclude Product Liability against claims by others who suffered injuries or property damage caused by a defective product manufactured, distributed or sold by your company. Completed operations cover may also be excluded; such cover typically protects a contractor against third part claims once contracted jobs cease.
Business owners may not understand the differences between the various liability policies, or even know that there is a difference. Adopting a reactive approach to risks, which remains far too common among SMEs (small & medium enterprises), may be costly in terms of money and time, may even lead to loss of clients and revenue.
Depending on the nature of your business or your customers’ requirements, you may wish to review your existing cover while all is well.
Insurance is a Risk Transfer Mechanic
In return for a small definite premium and cost
YOU are relieved from the uncertainty of a potentially much larger financial loss
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
