What is Public Liability Insurance For?
Public Liability Insurance provides coverage for legal costs incurred due to claims made by the plaintiff for injuries that third parties have sustained within the insured's premises, or for damages to public property while working in the insured's premises.
It is very common to encounter workplace accidents in Singapore. Even if a company goes out of its way to administer strict preventative measures to avoid accidents from occurring, it is still possible for accidents to occur.
Admittedly, the occurrence of accidents can be reduced through machine automation. However, not all aspects of the business can be automated. In fact, many parts of the operation process remains heavily dependent on humans (such as customer service and front-end staff). In the end, we still have to rely on insurance to protect us when accidents regarding third-party injuries and damages occur.
Should You Get Public Liability Insurance?
By and large, as long as your business has any form of work that requires people to be at your premises in person, Public Liability Insurance would be a must-have. This insurance type is typically a complement to property-all-risk, Work Injury Compensation. Public Liability Insurance acts as the foundation for business packages taken up by SMEs. The reason why this insurance type is particularly popular amongst SMEs is because of the cost-effectiveness of the premiums, priced at $300 and above.
Even though Public Liability Insurance is provided as a package in small business plans, you can still opt for singular Public Liability policies if you think that the coverage level is not enough to cover the potential losses that may be incurred in the case of an accident.
Are We Obligated by Law to be Covered Under Public Liability Insurance?
The short answer is no. This insurance type is not compulsory by Singaporean law. However, you should still consider obtaining Public Liability coverage in case your clients pursue legal action for injuries or damages within your premises.
Defects in infrastructure that injure members of the public, accidental harm caused by workers to people or property whilst at work. injuries due to falls within your premises are all common incidents that can cause customers who get injured to file a lawsuit to claim damages against you. It is advisable for you to protect your business by investing in Public Liability Insurance to give not only your workers, but also yourself a peace of mind.
How Much Coverage Should We Get?
Coverage level largely depends on the type and size of the business premises, the business industry, the type of work done for customers, and if contracts for projects require Public Liability Insurance.
For Instance, a renovation company could need a higher coverage than an office, because renovations in a client's premises can result in damages to existing fittings, property, or even neighbour's property.
The range of work conducted for your customers must be considered carefully. The amount of compensation given will differ greatly, depending on the value of existing items and property. This compensation also depends on the working premises.
To illustrate, renovations conducted at a museum can incur a lot of damages because historical artifacts are at risk of being destroyed. In other words, companies that have workers that conduct renovations at museums are likely to receive a more expensive premium, simply because they are more likely to incur high third-party damages.
What is the Cost of Public Liability Insurance?
Again, the cost varies greatly depending on the business type, even within the same industry. Premium rates will be influenced by industry type, claims history, policy requirements and nature of contract. Some industries generally have a bigger chance of claims payout, partially because of the duration of the project work, and also the nature of the job.
Another consideration that insurers take note of is the applicant's claim history. Poor Risk & Safety management at a company could greatly increase the cost of the premium.
Are employees covered under Public Liability Insurance?
No, because Public Liability Insurance should only cover third-party injuries and damages. A Work Injury Compensation (WIC) will be better suited for you if you are looking towards protecting your employees.
Are Tax Deductions Applicable for Public Liability Insurance?
Yes, Public Liability Insurance is tax deductible. In the Notice of Assessment (NOA) submission, Public Liability Insurance is considered as an expense. Proof of payment may be provided through premium receipt or policy contract. Thus, it is key that records of all business insurance expenses are kept safely in the reporting year.
Insurance purchases could help lower your tax payables whilst providing the company protection and reassurance it requires to flourish. Reach out to us to learn more about how you can receive coverage and simultaneously gain from a reduced tax return!
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