When should a retail business that sells products to consumers consider PI insurance?
A retail business is a business that sells products to consumers (excluding manufacturers, importers/exporters).
It is important to first explain the coverage of each of these policies. These policies do not overlap or provide double coverage. We have summarized an overview of the common policy feature provided by each of these policies. However, each insurance company has its own policy wording. This means that coverage can vary considerably from one insurer to another, and the summary below provides only a common summary of policy features. It is important that you compare each policy based on the suitability of the coverage for your individual business needs and seek professional advice.
Public and product liability insurance policies (broad form) provide insurance coverage with respect to the insured’s liability for loss or damage caused negligently to third parties, other than the insured, as a result of an event related to the insured business.
Indemnifies the insured company against legal liability to pay compensation in respect of claims for personal injury or property damage arising in connection with the Product and/or Service sold or supplied by the insured, however, does not cover the product warranty and is always subject to the terms, conditions and legal notices.
In addition, these policies also cover defense expenses even if the action against you is false or fraudulent, and establishes that an excluded circumstance does not exist.
Personal Injury – Coverage may include:
– Death, bodily injury, sickness, infirmity, disability, shock, fright, mental anguish and mental injury
– False arrest, wrongful detention or imprisonment, and malicious prosecution
– Unjustified eviction
– Assault or battery
– Insult, slander, defamation of character or invasion of the right to privacy
Property Damage: Coverage may include:
– Physical damage to tangible property
– Loss of use of tangible property that has not been damaged but cannot be used due to Damage to other tangible property
Additional comments
Common Exclusions – Advice for a Fee
– Does not provide coverage for pure financial losses where no injury or damage has occurred
Policy Trigger for a Claim: Bodily Injury or Property Damage
The Professional Civil Liability Insurance protects a natural person and/or company against the claims of a third party for economic compensation derived from the breach of their professional duty. It is an essential protection for professional advisors who provide advisory services or professional expertise to third parties.
Provides compensation for claims brought against the insured company and its directors, partners and employees for financial losses arising from a breach or alleged breach of their professional duty in the course of conducting their business.
Policy features may include:
– Trade Practices Legislation – Libel and Slander – Dishonesty
– Loss of Documents – Defense Expenses – Coverage of Official Consultations
Professional indemnity insurance generally aims to provide protection for:
– settlements, indemnities and/or damages awarded against you;
– legal costs and other expenses associated with defending a claim.
Who is a professional adviser?
Anyone who gives advice and/or services of a skillful nature to another person in accordance with an established discipline may be considered a ‘Professional’ adviser.
Why do Professionals need Professional Civil Liability Insurance?
A professional will present himself as possessing a special ability, which another can trust. Accordingly, the law requires the Professional to exercise the required skill to an appropriate level expected by that profession.
Professionals are human and mistakes happen. Any loss, injury, or economic damage arising from Professional’s error or failure to exercise the required level of skill may mean that compensation is awarded in favor of a person who suffers loss, damage, or injury. A professional can also be held liable for a mistake even if there was no negligence.
In the event that a loss, injury, or financial damage arises from failure to provide the appropriate level of skill, it may result in an award of damages being awarded to the third party who suffers the loss, injury, or financial damage. The Professional Civil Liability insurance provides coverage for damages awarded against the Insured Person and/or the Company, including costs or expenses incurred in defending the claim.
Additional comments
Policy trigger for a claim: financial loss resulting from a breach of professional duty.
It is important that professional liability insurance and product and liability insurance work together to ensure that your major business exposures are covered.
When should a retail business that sells and supplies products consider professional liability insurance?
Several key areas for business owners to consider when selling and supplying products:
• A business that charges a separate fee for advice must have professional indemnity insurance that covers its business in general or the area of its business that it provides advice for a fee. As mentioned above, liability insurance policies generally exclude advice for a fee, so in the absence of professional indemnity coverage, claims arising from advice for a fee would not be insured. . For example:
computer retailer
A computer retailer that supplies products and charges a separate fee to program and install software/hardware.
• If a Retailer provides advice in accordance with the sales of its products and manufacturing instructions and does not provide a separate fee for advice in connection with the sales of its products. In the event of a claim arising from negligence in connection with the sale of products resulting in injury or damage, your liability insurance policy is generally required to respond (subject to the terms and conditions of the policy’s coverage).
However, for some retail businesses, in the event of negligence, their customers may not necessarily suffer injury or damage, but pure financial loss. We provide the following examples:
fertilizer retailer
In the event that the wrong fertilizer was provided and the crop failed to produce, there may not necessarily be any physical injury or damage, just pure financial loss.
swimming pool company
Supply of swimming pool chemicals (licensing also requires swimming pool companies to maintain professional indemnity insurance)
A business owner should always obtain professional advice when obtaining and reviewing their insurance. Insurance products are legally binding contracts and under applicable law all parties to an Insurance Contract have a responsibility to know the details of that Contract. Insurance companies are not licensed to give advice and can only explain the features of their products. They do not advise on the suitability of coverage for a business.
