Public Liability Explained

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We are in litigious times indeed. You can't go through a news day without hearing about some lawsuit or another: against companies, publications, and of course, people. Personal injury law firms have their share of television adverts asking if you have been involved in a "slip and fall". Confused? Here is a little primer on Public Liability for you.

Public Liability boils down to this: "We agree to pay to You or on Your behalf, all amounts which You shall become legally liable to pay as Compensation – in respect of Personal Injury and/or Property Damage, happening during the Period of insurance, within the Geographical Limits, and caused by or arising out of an Occurrence in connection with your Business."

In laymen's terms your insurer will pay the costs incurred, if you or one of your employees injures someone or damages their property.

In Insurance Law, a key concept of any insurance coverage is the Insurer's duty to defend the Insured in legal claims. This includes settling reasonable claims. The Insurer must even respond to frivolous claims. This is where initial monetary costs occur; you pay your premiums to leave the handling of the claim in the hands of your insurance company. If the claim appears valid in any way, your Insurer will likely decide to settle with the claimant rather than go to court, which is often a much more expensive process. 

Here are some Frequently Asked Questions about Public Liability Insurance in Perth.

What exactly is public liability insurance?

Public liability insurance is insurance that you purchase in case property is damaged or someone is injured during the operation of your business.

Who/what is covered under my policy?

Your policy covers the handling and results of any legal actions (up to the sum insured) brought against you/your business by members of the public – customers, passers-by, etc. – for any injuries they have suffered or for any property damaged while your business is operating. The policy does not cover employees who are hurt or damaged property that belongs to you/your business – those are covered under different insurance policies.

Why is it a good idea to take out public liability insurance?

You never know when an accident could happen on. If damage to property is extensive or someone is seriously injured, it could cost you a lot of money. In some cases, the financial burden could force you to shut down your business – both to defend your claim in court and to pay out the amount for which you/your business is liable. Having public liability insurance means your insurance company handles the entire legal process, even the payout of the amount of liability.

Here are some examples of public liability insurances cases:

  • The classic "slip and fall", when someone slips, trips, or falls on your property (including public areas like restrooms) and suffers injury.
  • Someone trips because of loose gravel, cracked paving, broken brick, etc. on your driveway, walkway, stairs, sidewalk or other path and suffers injury.
  • Something falls on your property, hits, and injures someone – this person need not be a customer, but rather may be a member of the general public walking by/through.
  • An employee or business proprietor who makes house calls accidentally damages customer, neighbour or public property – or injures someone – during the course of his or her duties
  • An office-based business has an air conditioner or decoration in the window and it falls, damaging property or a person in the business below.

How much public liability insurance cover do I need?

This will depend on what other companies or entitles you work with. For example, if you are dealing with schools and government agencies, or if you are doing work in major shopping complexes or large commercial buildings, your contract may stipulate a minimum cover amount. Alternatively, your licensing authority may have set minimum cover amounts for different business types.

If a minimum amount has not been set out, you will need to decide on the cover amount. You should consult with your insurance broker/advisor and obtain a public liability insurance quote. In general, the more your business deals with the general public, the higher the amount of cover that should be considered.

Have any questions?

Get the answers and make sure you are adequately and properly covered – your livelihood and well being may depend on it.