What Is Public Liability Insurance?
Public liability insurance is a policy whereby the insured gets protection against damages or injury to third parties arising out of the insured’s use of public property or premises. It is also known as public liability insurance. It is liability insurance that covers your organization against claims and suits brought by those injured while on your premises. It covers those injured while using products or services provided by your business or third parties exposed to dangers due to unsafe practices. Public liability insurance can effectively protect the interests of your business in such situations, especially when it comes to incurring very high legal costs and penalties.
What is Public Liability Insurance and How Does it Work?
Public Liability Insurance protects business owners from financial loss. The policy pays for losses caused by damage to other people’s property, including cars, livestock, and boats, as well as personal injuries that are suffered on your premises. The coverage can be used for both commercial and residential properties.
Your public liability insurance policy will state when it expires, how much the reimbursement is for and if there are any additional terms. Your policy will also explain any limitations. You and your company must be aware of these limitations to not overpay or underpay for the coverage you need.
A public liability insurance policy comes as a standard form. The policy will cover any costs incurred by the owner or loss of their business due to any claims made against them. The insured can choose a deductible from 1% to 10% or higher. If a claim is made, the owner receives reimbursement for their losses.
Public liability insurance pays for the following costs:
- Any legal expenses related to the claim. Usually, defence costs are not included in public liability insurance policies. Thus, it is essential to read the policy carefully.
- Personal injury damages, including any medical expenses and loss of income due to any injuries
- Damage to another person’s property, including vehicles and livestock
- Damage to the property of another individual or business due to defective products being sold
- Crime such as fraud and robbery
- Any damage caused by an employee if the owner was not at fault for the incident
If the insured’s business is booming, they may be required to provide a public liability insurance certificate with their financial records. Banks and other financial institutions might only give business loans and mortgages if the applicant can provide proof of public liability insurance. Some businesses are required by law to carry public liability insurance. The law usually depends on what kind of industry the business operates in.
Who Needs Public Liability Insurance?
Public liability insurance is for any business that holds, uses or occupies public property such as roads, bridges or parks. Any business that does both commercial and residential work should consider purchasing this policy. Public liability insurance is required in specific industries, including but not limited to: contractors, property and casualty insurance companies, private investigators, builders, landscaping and air conditioning companies.
The coverage is often used by businesses in the hospitality industry, such as restaurants, hotels, casinos, and other shops that use the premises for business. Or to cover risks of injury or damage caused to people while on the premises. Business owners often recommend public liability insurance as a method of insuring themselves against potential claims. However, it also protects you and your staff against liability claims during business hours.
What is excluded from Public Liability Insurance?
Professional liability isn’t covered by public liability insurance. Professional liability insurance covers any claims made against you due to the professional services. Under-insured or uninsured motorists, tax liens or judgments and court costs do not qualify for coverage. The policy does not typically cover liability claims made against you to protect against loss of business profit.
What is Public Liability Insurance – To Conclude
I hope we have answered the question ‘What is public liability insurance’ for you today. Public liability insurance policies provide various levels of coverage. Contact your local insurance agent to discuss the coverage options you have and the costs involved. An insurance agent can help you choose the right public liability insurance for your business or organisation. There are many different policies to consider, so make sure that the policy you purchase fits your needs.
Find out more about the importance of insurance here.
Other useful links about Business Insurance:
Is Professional Indemnity Insurance a Legal Requirement?
How Much Product Liability Insurance Do I Need?
Is Employers’ Liability Insurance a Legal Requirement?
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