What is the Purpose of Public Liability Insurance?

Public liability insurance is a type of insurance coverage that protects individuals and businesses from financial loss and legal liability arising from third-party claims for bodily injury or property damage. It provides coverage when the insured party is held responsible for causing harm or damage to another person or their property.  For a business, public liability cover is often purchased alongside employers’ liability cover. However, some home insurance policies may also protect the homeowner from claims that may be brought against them by members of the public.

Here are some of the key features of public liability insurance:

Third-Party Protection

Public liability insurance covers the insured party against claims made by members of the public, customers, clients, or other third parties who have suffered bodily injury or property damage as a result of the insured party’s actions, negligence, or omissions.

Legal Expenses

The insurance policy typically covers legal costs and expenses incurred in defending against a claim, including legal fees, and settlement or judgment amounts, up to the policy’s limit of indemnity (i.e. the financial limit on the policy).

Compensation Payments

If the insured party is found liable for the injury or damage, public liability insurance provides financial coverage to compensate the injured party for medical expenses, property repairs, or other financial losses they have suffered.

Property Damage Coverage

Public liability insurance not only covers bodily injury claims, but may also include protection for damage caused to third-party property. For example, if you accidentally damage someone’s property while working on their premises, the insurance can help cover the cost of repairs or replacement.

Business Continuity

Having public liability insurance is essential for businesses as it helps protect their financial stability and reputation. By covering the costs of potential claims, it prevents significant financial losses that could otherwise disrupt business operations or lead to bankruptcy.

As ever with insurance, it is important to note that public liability insurance typically covers claims arising from incidents that occur in public spaces, on the insured premises, or during business operations but that the exact coverage may vary depending on the policy.  It is crucial to review the terms and conditions, policy limits, and exclusions to ensure adequate protection. Speak to your Insurance Broker should you need advice.