If you’re looking at public liability insurance one of the first things you’ll likely want to know about is the cost.
The cost of public liability for your business will depend on a variety of factors, and in this guide we’ll run through them in more detail.
All businesses want to save money on their expenses, and by knowing what affects your insurance cost should be better equipped to get the best deal.
Your Occupation or Business Type
One of the biggest impacts on the cost of your insurance will come from the type of business that you are running.
The changes of your business type making a claim, and the potential size of the claim, will affect your insurance cost. The higher the potential risk, the higher the cost will be.
Looking at tradies as an example, a low risk trade such as a residential carpenter will have a much lower premium than a high risk trade such as an underwater welder.
It is important to give the insurer (or broker) a good description of your business activities to ensure that you’re being charged the right price and are properly covered.
The Size of Your Business
Often the factor which can affect a premium the most is the size of the business being insured.
Some insurers measure the size of a business by its revenue, some measure it by the number of staff and some use a combination of the two.
Generally the larger your business, the larger your public liability cost will be.
If you have unusually high revenue for the number of staff you employ, or visa versa, you may find that different insurers will have dramatically different costs depending on how they ‘size’ a business.
Special Factors
Aside from the size and type of business, there are many other smaller factors which can affect the final cost of the insurance.
These factors include the locations your business operates in, especially high-risk locations such as mines, quarries, railway stations and airports.
Whether or not you employ subcontractors or use labour hire can also have an impact on your insurance cost.
Level of Cover Required
The final factor we’ll look at is the amount of insurance you require.
Public liability is generally available in amounts ranging from $5 million to $20 million. The more insurance you need, the more it’s going to cost you.
The good news is that the cost won’t increase directly in line with the amount of cover. By doubling your cover from $5 million to $10 million the cost will increase, but it will be far from double.
Regardless of what the cost of your insurance comes in at, it’s fair to say that public liability offers very good value for more businesses, and can provide you with serious protection in case things go wrong.
