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What is Public Liability Insurance?

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What is Public Liability Insurance?

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If you’re a business owner, then you surely must be aware of all the possible risks to your business. But if it is a large commercial business, then no matter how solid your business plan is, things can take a slight deviation which can lead to third-party legal issues. This is when public liability insurance can help.

To understand the public liability insurance meaning and all its aspects, read on. 

What is public liability insurance?

Public liability insurance is a type of commercial insurance that protects your company from claims made by members of the public who sustain injuries, fatalities, or property losses because of your business operation. Customers, guests, and delivery people all fall under the public category.

Public liability insurance pays for the price of public claims for accidents that occur because of your business. It is created to protect you and your company if a third party from the public files a claim against you after being hurt or having property damaged because of your business.

This insurance covers general liability risks and is a part of a business owner's policy (BOP). The insurance covers the third-party accidents directly on your commercial property and is also referred to as premises liability insurance.

Why do we need public liability insurance cover?

Mishaps like a faulty product, damage, or injury to others are highly possible if you have a large commercial business with multiple offices. It is even more crucial to have such insurance if the business involved includes organisations like hospitals and BPOs where client interaction is frequent.

Additionally, if your business falls under the following categories, then it’s highly recommended to have public liability insurance in your belt.

  1. Regular client meetings in your office.
  2. Getting access to client assets like in the case of IT firms.
  3. If you’re using a third-party site for your business.

What does public liability insurance cover?

Public liability insurance covers the expense of third-party injury and property damage claims related to your company. It covers mishaps at your place of business and other places connected to your job, like a client's house.

Given that this is covered by a comprehensive commercial general liability insurance policy, if a client or member of the public sustains an injury while on your property, your public liability insurance policy would pay for the resulting medical expenses, property damage, and legal fees after you have met your deductible, up to the policy limits.

This insurance would also cover mishaps that you or a staff member might have while on a client's property. However, It doesn’t cover any harm or losses(damage to materials, machinery, etc.) that befall you, your company, or your workers.

The coverage under the public liability insurance act 1991 is expanded to include risks specific to the industry, non-industry, and all business units dealing with hazardous substances. This coverage can be expanded to pay for additional legal costs related to 

  • Natural disasters
  • Transportation
  • Treated effluents, 
  • Sudden or inadvertent pollution, etc.

What is not covered in public liability insurance?

As per the Public Liability Insurance Act 1991, the insurance does not provide coverage against the below:

  • Any medical injuries to you and your staff
  • Any harm to your property
  • The expense of fixing shoddy work
  • Unlawful Activity
  • Any contract-based liability
  • Events that take place before or following the policy period
  • Injury from Asbestos Advertising
  • Pollution
  • Recklessness or willful carelessness

What could a public liability claim result from?

When you own your own business, you have a lot to consider; the last thing you need to be concerned about is the possibility of a public liability claim. These are a few instances where a public liability claim might be made: 

  • Due to your business practices, third parties may suffer harm or lose their lives.
  • Property loss to a third party because of your careless business practices.
  • Your negligence can directly result in financial loss.
  • Equipment was installed improperly and resulted in property damage.

Anytime your firm engages in any kind of interaction with customers, clients, or suppliers, there is a chance that a claim will develop.

Benefits of public liability insurance

With so many risks involved at your business sites, it only makes sense to have insurance that protects you from the worst. Here is why it’s beneficial

  1. It will allow you to continue your business without hindrance inspite of any liability issue.
  2. The policy covers you from false arrest, wrongful entry, slander, etc.
  3. If you’ve rented the space and signed a lease and then any liability occurs, you can claim the benefits of the insurance.
  4. All legal lawsuits, investigations, and settlements will be done by the insurer.

How does this policy function, and how is the claim determined?

Unlike motor insurance, public liability insurance is not mandatory for businesses. However, if you do consider getting one, here is what happens before you are issued a policy.

  • The risks of your business are evaluated, and the kind of loss you can expect.
  • Compare the plan with other providers and buy the best plan.
  • In the case of a claim, inform the company immediately.
  • A surveyor will visit the site and determine the extent of the damage caused and prepare a report of it.
  • The claim amount will be intimated to you if you’re eligible for a claim

The insurers use a variety of elements when determining the public liability insurance rate. The level of risk to which your company is exposed has a significant impact on the cost of third-party liability insurance. The larger the risk, the higher the premium or vice versa. Other elements include the insured's history of claim settlements, how the insured handles particular risks, business documents, etc.

Summing up

Even the most cautious business owner occasionally experiences unanticipated or unplanned events or mistakes. If you have the appropriate insurance coverage for your company, you can operate with the confidence that if one of your clients suffered a loss, their property would be repaired, their belongings would be replaced, and their medical expenses would be covered. It’s better to safe than sorry.

FAQs

What does public liability insurance cover?

Public liability insurance protects you from a legal obligation if you ever have to compensate members of the public for death, medical-related injuries, property damage, or other losses brought on by the activities your firm engages in.

What is public liability insurance?

A public liability insurance plan covers any bodily harm and property damage to a third party that is brought on by the policyholder while they are on their property.

What do I need public liability insurance for?

If a customer slips and falls at your place of business or if you or an employee damages a client's property, it could cause high medical or repair bills or possible legal action. Your company's financial impact can be lessened with the use of public liability insurance.

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