Top Myths about Public Liability Insurance Busted

Top Myths about Public Liability Insurance Busted

There are various misconceptions about the public liability insurance Singapore. Following are some of those myths that have been busted.

Myth 1: Purchasing a cover is compulsory

This is not true at all. The law does not make it mandatory for your business to buy the public liability insurance. But, practically speaking, when you or your personnel have to deal extensively with the public and customers visit your workplace quite regularly, PL insurance is a “must have”. Else, you or your employee could damage a property or cause injury to someone while at the workplace.

Even if you are running a home based business, it may still be possible the public members or customers visit your house for meetings. So, it is recommended to look for an appropriate cover so that if they fall or trip and claim for compensation for their injuries, you are adequately covered.

Myth 2: Your financial loss can be covered by PL insurance

White, it is quite a simple assumption to make. The statement is just partially correct. Ideally, a standard insurance policy does not provide coverage against claims for a financial loss. But it can still cover any financial loss due to injuries or damage.

Myth 3: PL insurance is only required for manual trades, contractors or builders

This myth is a not difficult to explain. But while it is true that PL insurance is more exposed to liability losses and so need thus coverage more, that does not mean that non-manual or professional trades do not suffer from huge financial claims from aggrieved parties though it may not be at a similar frequency. For instance, you have an IT contractor is working in your office, a serving lady may trip over his laptop bag and fracture her arm in the process. She cannot come to work for around 30 days and holds you responsible for this. Tripping and slipping are likely to raise innumerable claims for compensation.

Myth 4: PL insurance policy can be costly

While it is true that there are some claims that can amount to several hundreds of thousands of dollars or even higher for severe injury losses, such incidences are not very common. The fundamental of insurance coverage is that it operates on the law of big numbers. Since a large number of businesses are purchasing this cover, most of the times the policies are reasonably priced so that companies of different sizes and types and individuals from different financial backgrounds can afford them easily.

How To Guarantee The Completion Of Your Construction Project

A contract agreement requires all parties involved to adhere to the particulars of the contract. There is always a chance that one or more of the parties fail to deliver on their side of the agreement. While this is easily remedied in most cases since contracts are legally binding and the aggrieved party can be compensated through court procedures, it is an added burden for owners of building/construction or development projects. If a building contractor fails to deliver, the owner of the project loses money as well as precious time, which will translate to even more monetary losses. How, then, can project owners protect themselves from such a situation and guarantee the completion of their projects? The best way to do that is through a type of bond known as a “€˜performance bond”€™. A performance bond is a financial guarantee provided by an insurance company or a bank for the completion of a project in the event that the contractor fails to deliver on their obligations under the contract agreement.

Performance bond process

Construction projects are awarded by project owners only when a Singapore performance bond is provided by bidding contractors. This gives assurance to the owners that the contractor will be held accountable for their actions. There are three parties involved in a performance bond:

1) Insurer – the insurance company or bank,

2) Principal – beneficiary of the guarantee, the owner of the project,

3) Contractor – the client of the insurance company who pays for the performance bond.

When awarding a contract, project owners usually require contractors to provide a performance bond as an insurance for the completion of the project on-time, within contractual guidelines and within the budget. If a contractor is able to fulfil their contractual obligations, the performance bond will become null and void. However, if a contractor is unable to complete the project or goes beyond the budget or delivers sub-par quality of work, the project owner can make a claim against the performance bond. After a claim is made, the insurer investigates and determines whether the claim is valid or not. Therefore, in order for the bond to be effective, guidelines in the contract as well as the bond need to be very specific so as to not leave room for vague interpretations. If the claim is found valid, the project owner is covered for losses by the insurer as stipulated in the performance bond. The insurer will then get the payment reimbursed to themselves from the contractor.