Public Liability Insurance Explained

While personal insurance policies are one thing, business insurance policies are entirely another. When the financial structure of a business is damaged due to some unforeseeable circumstances then the result is much larger in scale than if an individual’s personal finances get unsettled.

One of the most damaging aspects of running a business is that a simple injury or damage based public liability claim can end up ruining the future of the business, regardless of whether it is small, medium, or large scaled. This is where public liability insurance policies enter the picture.

Public liability insurance policies are those business insurance policies that would protect a business from not only the financial ramifications of injury caused to a third party and damage caused to third party possessions but also from the legal expenses of battling such lawsuits.

The usual situation pertaining to a public liability progresses like this. An individual gets injured on the business’s premises or due to a fault of some employee with the business. Alternatively, something belonging to another individual can also be damaged by negligence or plain happenstance.

The individual, in order to recoup the cost of getting medical assistance or repair the item that has been damaged, files a public liability lawsuit against the business. In such situations, there are very few solutions for the business.

It can choose to fight the lawsuit and incur the legal expenses of this without any guarantee of results or it can choose to settle with the third party. In either case, the business would have to shell out a considerable amount of money. However, if the business had a good public liability insurance policy then this would not be the case.

Instead, the moment a public liability case is filed the business can make an insurance claim towards the same. Public liability insurance policies have saved a lot of businesses from folding over the smallest of injuries or damages.

In South Africa, the courts have become more lenient to people filing public liability cases of late. This is evident by the fact that the legal system of the country has slowly started awarding higher rewards and damages against businesses defending a case of public liability.

A typical public liability insurance policy would protect a business against a wide variety of situations such as injury or death of a third party individual and even damage or accidental loss of another individual’s property.

While this is the primary protection that a public liability insurance policy would offer, there are some additional features as well. For instance, most public liability policies cover the business from the legal expenses of fighting the case and even cases involving defamation, pollution, and contamination.

Apart from this, many public liability insurance providers have other optional coverage or features that a business can choose to combine with their public liability insurance policies.

These include cover for defective workmanship, faulty products, internal and external liabilities to inventories, stocks, fleets, trustees liability and even something as innocuous as veld fires liability.

A public liability insurance policy can keep a business from going bankrupt at the drop of a hat for the most inconspicuous situations in a normal day.

Such situations can arise in any business, at any time, and at any place. This is why if you are running a business of your own, you should, at the very least, get a public liability insurance policy.