Public Liability: Are my employees covered?
By Kate Lowery, Portfolio Technical Manager for Liability, Commercial Insurance, IAG
Generally speaking, public liability protects against claims made against your business by customers or the public, it does not cover employees injured on the job – this is covered by mandatory workers compensation insurance.
Of course all policies have slightly different criteria but most liability policies will not cover a worker that is considered a worker under workers compensation law in the state where the business operates (each state has differing definitions of what a worker means in its legislation). There are some exclusions to this - for example, unpaid work experience students and voluntary workers are not necessarily excluded from your public liability policy as they may not be considered “employees” by workers compensation legislation so an injury to one of these workers may be collectible under your liability policy - meaning these workers may be covered for injury sustained on the job.
There are a number of other parties who are not employees (or workers) by definition of the workers compensation legislation such as labour hire workers (agency labour) who may be covered for injury by a liability policy. An agency worker is technically not an employee of the insured and may be covered for workers compensation by the agency that hired them, but as they were on your premises and under your supervision it may be possible for a claim to be made against you for injuries they may sustain.
When it comes to contractors and sub-contractors, it will often depend on the type of work being undertaken, the supervision you provide and if there was legal liability or negligence involved.
The actions of staff / employees while they are acting on behalf of your business are covered by your policy – for example if the actions of one of your employees (part-time, full-time or casual) causes an injury to a member of the public or another third party or causes damage to third party property, your public liability insurance will provide protection against claims made in relation to the incident.
It is important to note that sub-contractors may not automatically be covered under your public liability policy. As sub-contractors can work for more than one company at a time they may need to be specifically added to your policy (which will generally mean an increase in premium).
A sub-contractor may not automatically be covered by your policy for the work they do for you, but they are still third parties to your policy so it is possible they could still make a claim against you.
A lot of the time sub-contractors have their own public liability policy. Either way, it is important to talk to both your sub-contractor and your broker to ensure you are covered should an incident occur.
All advice given is general in nature and all policies are different. You should consult your independent insurance adviser if you are in doubt about what cover you need or what coverage your current policy provides.
You can read more about workers compensation in our earlier blog article here
About the Author
Kate Lowery is the Portfolio Technical Manager for Liability in Commercial Insurance at IAG where her role includes developing and running training, product development, monitoring emerging risks and maintaining underwriting tools. She has been with CGU since 2010, during which time she has held specialist and technical underwriting roles.
Kate holds a Bachelor of Insurance and Finance, and has 14 years of insurance industry experience with more than 10 years experience in liability insurance.