Most businesses know that it is important to have public liability insurance, but what is public liability insurance?
In simple terms a public liability insurance policy protects you in the event of claims being made against you by third parties for injury or damage to persons or property for which you are legally liable.
In terms of a business insurance policy, the insurance protects the policyholder against claims against them in respect of injury or damage arising out of the conduct of their business. It is important in a business liability insurance, that the business description in the policy is consistent with the actual activities of the policyholder, as it is for the activities as described in the business description that the policyholder is covered for. Whilst the business description may not in itself may not be exhaustive, it will be subject to an opinion of whether any activity undertaken is consistent with the business description for example one would expect a building contractor to occasionally undertake the work of a plasterer, roofer, carpenter but on wouldn’t expect a plumber to be engaged in building a garage.
The public liability insurance policy meets the legal liability of the policyholder for any awards made against the policyholder for bodily injury and property damage, and perhaps even more importantly in many cases, meets the cost of the defence of such actions, such defences can be very expensive. Many actions under public liability insurance claims do not ever make it to the courtroom, the insurer will look to mitigate costs by settling early where appropriate.
Whilst a public liability policy is protection in respect of legal liability, it is not a blanket protection. Policy cover is often restricted in terms of work in hazardous locations, certain types of work and there will generally be a third party property damage excess applicable to all claims in respect of damage to third party property.
It is essential that you check the terms and conditions of your policy to ensure that it meets with your requirements.