Ensuring your Public Liability Cover protects your Business
This article was originally written for the Australian Tourism Export Council for publication on its website http://www.atec.net.au/.
The end of the calendar year can be the busiest time of year for many businesses and unforeseen headaches are certain to arise for those in service industries such as the tourism and hospitality sectors. Now is a good time to revisit your insurances and ensure you have adequate cover to prepare you for those worst-case scenario situations.
What is adequate cover?
If you are running a business where, for example, you are providing food, entertainment or accommodation for holiday-makers, then you should already have some form of public liability insurance. We recommend your level of coverage should be at least $20 million.
Why at least $20 million? That is because personal injury compensation claims are reaching extraordinary levels[i] in Australia and public liability exposure for tourist services is high. Claims related to slip and falls, sporting accidents, liquor liability, liability to guest entertainers, accidents with glass, and accidental fires can be all too common within the tourism industries. Remember too that the Courts award compensation claims not just for damages related to medical expenses, but frequently also for payments related to lowered life-expectancy and reduced employment prospects. Claims like these can end up compounding into multimillion-dollar figures.
If you are unlucky enough to be on the receiving end of a multimillion-dollar claim or claims you do not want to find yourself underinsured and unable to protect your business. You can have personal liability and your personal finances ruined if you face a serious personal injury claim or claims without an appropriate level of insurance cover. If your level of cover is below $20 million you should increase your coverage. It can be more economical than you may first think.
Where can I find more information?
If you have concerns about your cover please contact one of the authors who will be happy to speak to you.
[i] See e.g. Palmer v RTA & Ors  NSWSC 34; RTA & Ors v Palmer  NSWSCA 58. The total award in this case amounted to $16,347,478 excluding legal costs. See also Raper v Bowden  TASSC 35 as an example of a similar high level of award.