Why liability insurance is so important

There are many examples of injuries in the workplace that can be experienced by a customer or contractor. For example: a customer slips and falls over in your hire yard and sues your company for the injuries they have suffered. A customer is injured from using equipment hired from you and sues your company for medical expenses claiming you hired unsafe equipment. While it is easy to say, this won’t happen to my business, even if the risk seems low the financial implications can be significant. What’s even more alarming is you don’t have to be directly at fault for the legal fees to add up. As an example, an organiser of a charity bike rider, was presented with a personal injury claim from an injured rider. The accusation was they owned sheep which had escaped a paddock and caused a motorbike accident. The accident happened on a public road and there were no other parties involved. This case incurred $5,000 in legal costs just to reply to the nuisance suit.

Where a claim is bought before the court, the costs can escalate. In one example, a hire company was faced with a $500,000 bill after a customer injured his ankle after the scaffolding trestle he hired collapsed. The fall was minimal and required no hospitalisation, however, the injured party also claimed psychological injuries as a result of the minor fall. The costs incurred in this claim were in excess of $400,000, with the legal costs being almost as great as the awarded damages. Given the unpredictable nature of accidents, liability insurance can assist you with the costs of investigating, defending and settling demands, as well as compensation payments you are found legally liable to pay. Can your business afford not to have it?

For more information contact HRIA Insurance through your HRIA member portal.