With the season of festivals and markets sweeping the country, many small business owners are exploring their options when it comes to public liability insurance, a requirement for most stall owners.
Paul Sciberras, senior leader of AAMI Insurance’s commercial portfolio, told StartupSmart many business owners who are exploring running a market stall can end up paying significantly more than they need to.
“The biggest mistake that small business owners make, especially start-up owners, is not disclosing their full range of activities when they take out a public liability policy,” Sciberras says, adding this is essential for the insurer, and successfully processed claims.
“In extreme circumstances, failing to do this can lead to claims being declined. Liability claims can be extremely expensive. Most start-ups would be financially crippled if they did not have the correct cover and had to foot the bill of a large liability claim themselves.”
While stallholders are not legally required to have a policy, most exhibitors expect sellers to have some coverage.
“It’s fairly standard for an organiser to insist on receiving a certificate of currency to confirm that the cover is in place before it finalises the exhibitor’s registration,” Sciberras says.
“Start-ups should not go into business without it, nor should established businesses operate without understanding the risks they face.”
AAMI last week increased its policy targeted specifically at stallholders to cover up to $20 million.
Retail spaces can have a floor size of up to 25 square metres. Sciberras adds the policy doesn’t cover short-term leases or pop-up shops.
“Pop-up shops and short-term tenants will require a more conventional public liability policy and generally also require cover for any property they use on a more permanent basis,” Sciberras says.