The Cost of Not Having a Public Liability Insurance Policy
Public liability insurance is essential for businesses. While you are not under any obligation by law to take out this policy, as a business in the construction sector, it is highly recommended that you do so, alongside other policies, so you have comprehensive construction insurance. As with other policies, you have everything to gain by getting a public liability insurance cover. If you neglect to do so, your business may lose big on the following fronts.
1. Paying for Compensation Claims Out-of-Pocket
Public liability insurance covers personal injury and damage to property for third parties such as customers and investors, and the general public. These risks are inherently high with trade and construction businesses.
Depending on the severity of the injuries and the extent of property damage, a successful public liability claim against your business can amount to up to thousands of dollars, and even more. Without the benefit of the protections of an insurer, you will have to come up with the money required for compensation. You may also be required to cover the legal costs for all parties involved and court fees.
A large sum of money may not be too easy to put together. Even if the money is readily available, it can leave your business with significant cash flow problems. All of this can disrupt your business operations.
2. Missing out on Lucrative Contracts
Most clients, including both private companies and government agencies, require that you provide proof of insurance before working with you. This means that without a comprehensive insurance plan in place that includes public liability insurance policy, your business's chances of going past the pre-qualification process for such contracts are lower. As a business, you can always do more work, not just to generate revenue and make a profit, but also to build your portfolio. Missing out on the opportunity to work on these contracts for lack of proper or adequate construction insurance will, in both the short and long-term, not be good for your business.
3. What Can You Do?
The downsides to not having a public liability insurance policy, as already highlighted, should inform your decision to take out the policy as soon as possible. You can never go wrong with comparison shopping. You will find insurers that offer different public liability insurance policies, and compare what each has to offer. Most importantly, ensure that you understand the inclusions and exclusions of your policy, and do not hesitate to ask any questions.
