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  • #987788
    viksay
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    Hi all,

    Were in the midst of a small business startup with myself and a partner, where our primary service is providing a shisha service to cafés. They are pretty much outsourcing the service from us.

    So in terms of providing a smoking device to customers, is there any types of insurance we will need to take out? Such as public liability insurance? We will start off quite small so we want to keep costs as low as possible until we start to see things picking up.

    Also, is it compulsory to have insurance when it comes providing a service to customers in someone else’s place of business?

    Cheers

    #1164353
    alliedib
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    Hi Viksay,

    Sounds like an interesting venture – I have seen these in various places around the world although I have never tried it….. hopefully I can point you in the right direction with some of your queries…

    viksay, post: 190136 wrote:
    our primary service is providing a shisha service to cafés. They are pretty much outsourcing the service from us.
    So in terms of providing a smoking device to customers, is there any types of insurance we will need to take out? Such as public liability insurance?

    You should certainly have public/products liability insurance – this will usually be one of the first requirements anyone using your services will ask for. Bear in mind that most insurers will exclude any claims related to smoking/tobacco (either as standard in the policy wording or by adding an exclusion depending on the activites) and a lot of insurers will not cover any liability associated with equipment on hire. If you talk to an insurance broker they may be able to source terms from insurers that don’t deal with the general public.

    viksay, post: 190136 wrote:
    We will start off quite small so we want to keep costs as low as possible until we start to see things picking up.
    I think that it is important to have ‘peace of mind’ and that is what you are paying for when you place an insurance policy in your risk management program. The likelihood of something happening may be quite minimal, but can you afford to either (a) pay for compensation; or (b) pay for the costs to defend a claim; if someone is injured or their property is damaged due to your business??

    viksay, post: 190136 wrote:
    Also, is it compulsory to have insurance when it comes providing a service to customers in someone else’s place of business?
    The only ‘compulsory’ insurance is workers compensation (as required by law if you have workers – refer to your state workcover for details as to who are defined as workers) but liability insurance is on the ‘very highly recommended’ list. It may be a requirement of the contract of service you sign with your customers or venues.

    Hopefully this assists – if you have any more questions or need me to clarify anything please let me know.

    Regards,

    Mark

    #1164354
    Carl Desacola
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    Hi Viksay,

    For a start-up operation such as yours, I would definitely recommend public liability insurance as a minimum. It is not compulsory but it would be very prudent to at least have it given the potential risk of legal liability.

    Note, however, that the scope of public liability insurance policies differs from insurer to insurer – and even with the same insurer over the course of time – so make sure you pay particular attention to (1) scope of cover; (2) conditions and (3) exclusions.

    Kind regards,

    Carl Desacola, Lawyer & Registered Migration Agent (MARN 1461661)
    Winthrop Mason | Business Lawyers & Migration Agents
    http://www.winthropmason.com.au

    #1164355
    affgar
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    @Carl
    I thought public liability insurance was a legal responsibility of all registered Australian businesses …. is this not correct? Or is public liability insurance only compulsory in certain industries & professions?

    #1164356
    Carl Desacola
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    Hi Affgar,

    That is a very good question!

    The answer is that there is no law that requires all registered Australian businesses to take out public liability insurance (no doubt much to the chagrin of public liability insurers!)

    There may be specific contracts though that require a particular business to take out public liability insurance. For example, government departments would typically require their contractors to take out public liability insurance, amongst others, as a pre-condition to accepting their tender.

    Similarly, there are many industry and professional groups that make it compulsory to take out public liability insurance (again amongst other types of insurance) before they will accept you or your business as a member.

    This is probably a moot point though because, in practical terms, public liability insurance is a definite must for most businesses in this day and age. I hope that clarifies the position.

    Kind regards,

    Carl Desacola, Lawyer & Registered Migration Agent (MARN 1461661)
    Winthrop Mason | Business Lawyers & Migration Agents
    http://www.winthropmason.com.au

    #1164357
    viksay
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    Hi Mark,

    Thank you for your response, much appreciated.

    alliedib, post: 190172 wrote:
    You should certainly have public/products liability insurance – this will usually be one of the first requirements anyone using your services will ask for. Bear in mind that most insurers will exclude any claims related to smoking/tobacco (either as standard in the policy wording or by adding an exclusion depending on the activites) and a lot of insurers will not cover any liability associated with equipment on hire. If you talk to an insurance broker they may be able to source terms from insurers that don’t deal with the general public.

    I’ve spoken to Allianz business and have a number of callbacks waiting for Monday morning. Allianz business said they wouldn’t insure us but would forward us to one of their independent brokers to speak with. My understanding is this is what you meant by saying they will exclude any claims relating to smoke/tobacco products?

    My main concern isn’t our products, but whether something happens to a customer just to cover us from any legal liability.

    Carl Desacola, post: 190173 wrote:
    Hi Viksay,

    For a start-up operation such as yours, I would definitely recommend public liability insurance as a minimum. It is not compulsory but it would be very prudent to at least have it given the potential risk of legal liability.

    Note, however, that the scope of public liability insurance policies differs from insurer to insurer – and even with the same insurer over the course of time – so make sure you pay particular attention to (1) scope of cover; (2) conditions and (3) exclusions.

    Kind regards,

    Carl Desacola, Lawyer & Registered Migration Agent (MARN 1461661)
    Winthrop Mason | Business Lawyers & Migration Agents
    http://www.winthropmason.com.au

    Hi Carl,

    Thankyou for the recommendation.

    Will there be a need for a lawyer at all in the insurance process?

    Cheers,

    Vik

    #1164358
    Carl Desacola
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    Hi Vik,

    Most people don’t bother involving a lawyer when organising public liability insurance – and, most of the time, there is no issue with that.

    As a lawyer, however, it would be remiss of me not to recommend that you should at least have a legal professional cast their eyes over the policy wording and certificate of insurance to confirm that everything is in order.

    Even a “standard” public liability insurance policy (assuming one exists) can apply differently from one business to another, so it is always better to err on the side of caution.

    Kind regards,

    Carl Desacola, Lawyer & Registered Migration Agent (MARN 1461661)
    Winthrop Mason | Business Lawyers & Migration Agents
    http://www.winthropmason.com.au

    #1164359
    alliedib
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    viksay, post: 190198 wrote:
    Hi Mark,
    My main concern isn’t our products, but whether something happens to a customer just to cover us from any legal liability.

    Hi Vik,

    Most Business Insurance policies combine Public Liability and Products Liability together – you basically can’t just ask for Public Liability.
    Product Liability doesn’t cover your products themselves – it covers other parties for damage or injury that your products may cause (notwithstanding the exclusions of the policy)

    Carl Desacola, post: 190271 wrote:
    As a lawyer, however, it would be remiss of me not to recommend that you should at least have a legal professional cast their eyes over the policy wording and certificate of insurance to confirm that everything is in order.

    Even a “standard” public liability insurance policy (assuming one exists) can apply differently from one business to another, so it is always better to err on the side of caution.

    I would suggest engaging a solicitor look at any contracts that you may be entering into and advising any clauses that may be need to be reviewed or removed (especially hold-harmless or indemnity clauses). For an insurance policy, I certainly encourage my clients to include their solicitor / accountant / financial planner in discussions so I can determine exactly what is required.

    As for the actual policy itself, there is no such thing as a ‘standard’ insurance policy – each insurer provides a different basis for cover. If you are going to be purchasing a policy direct from an insurer, you may want someone to assist you to review the cover (lawyer or solicitor). The other option is to speak to an insurance broker – they work for you (legally) and should be able to review different policies to find the one that closest suits your requirements. As mentioned before, they will also be able to look at policies that you cannot access yourself – this is especially useful when you have a risk that is ‘outside the square’.

    Regards,

    Mark

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