When finding public liability insurance policies, there is a trap that the insurers don’t tell you, when they offer you a cheap premium.

There are some obvious advantages of going with the cheapest insurance: you’ll save money in the short term, and while saving money is a strong draw for most people, insurance helps protect you financially over the long term and allows you to recover from a major disaster. It’s what the insurers don’t tell you that may result in your carrying the risk when choosing a cheap policy.

“Not all public liability insurance policies are the same, insurers are obliged to tell you what they cover – not what they have left out. Insurer’s wording may include reduced cover option or simply no cover for common claim scenarios”

There are potential disadvantages of choosing the cheapest insurance policies, including:

• Less coverage
• Higher Excess
• Lower claims assistance and broker support
• Rates more likely to increase at renewal

Before choosing an insurance policy, you should understand what’s covered and what isn’t.

Less coverage

Do you know exactly what you’re covered for? In the event that you need to make a claim, will it be rejected because you didn’t read the fine print of your policy? If you look after a customer’s goods, it is common for insurers to exclude Care Custody and Control extension, some insurers may describe this as goods in physical and legal control. Care Custody and Control exclusion commonly applies to occupations such couriers, transport companies, mechanics and even pay TV installers

Higher Excess

It’s when a claim happens that you truly appreciate the value of a public liability policy, however, some insurers will have a high excess for different claim scenarios. Check prior to purchasing the policy, the excess, and compare other insurers to see if it is a common excess.

Lower claims assistance and broker support

What’s the point of insurance if it steals your peace of mind rather than gives you peace of mind? Customers are in very safe hands when it comes to Ausure brokers policies, we have a dedicated claims team and over 20 years of insurer relationships.

“Cheap” insurances often come with poor claims ratings, long claim settlement times, and little to no support, essentially you become another cog in the machine. While working with a broker may cost a fraction more to start with, come claim, it means less stress for you as you can hand things over to the professionals.

An Ausure broker has the industry knowledge and connections to ensure that you get the right level of cover to protect your business at a competitive price.

Public Liability Insurance Rates more likely to increase at renewal

To get you in the door, or on the books, budget insurers will often offer lower rates for a new business. The cheap policy is often only cheap for the introductory period and then at renewal, your rate increases substantially. You may also find, that no claims discounts are not offered on cheaper policies, and because the policy has less broker support, it is highly unlikely you will be able to negotiate with your insurer for a better value premium.

While we are currently seeing increases in premiums as a result of significant events that have occurred over the last 12 – 18 months. EG, 2019/20 bush fire season, 2021 storms and the current COVID-19 situation is also creating a lot of uncertainty across the globe and not just locally here in Australia. All types of policies are being affected, from personal to all styles of business policies regardless of the claims that have been made

When you get your public liability quote, you will be asked what level of cover you require. Cover generally offered is either $5, 10, or $20 million. $5 Million will normally be the cheapest, however, there is often a marginal difference between $5 and $10 Million dollars cover, and often, $5 million may not be enough to satisfy a government or business tender process

Expanded article from : https://publicliabilitycomparison.com.au/problem-cheap-public-liability-insurance/