Understanding public liability and its types 8^th August 2022

All businesses people are constantly conscious about managing finance and cash flow. With this unpredictability surrounding your business, it is stressful to consider other factors that may drain significant money. For instance, if a customer gets hurt within your company premises, let us say rolls their ankle because your floor is slippery, you might be liable to pay their medical expenses or the expenses of a lawyer or an investigating officer.

As you might know, these expenses quickly cut a hole in your pocket and might leave your business bankrupt. Opting for public liability insurance is best to avoid these unforeseen problems.

It offers optimum protection to a business, a contractor, an event, or even a person from any legal charges that they might be liable for in case of injury, bodily harm, loss or damage to property, or even death of a third party resulting from their negligence.

This blog aims to give you an insight into public liability insurance and its types to decide on a suitable choice for your business.

Does your business require public liability insurance?

Businesses that constantly interact with customers and the general public are in great need of this type of insurance. Industrial as well as non-industrial organisations require this. It is especially recommended to doctors, hospitals, and IT-intensive businesses as they are constantly handling their customer's assets.

Moreover, even if you're an online business and use third-party sites or companies to deliver your products, you must invest in public liability insurance to avoid legal fees ensuing from any mishaps that might occur during the delivery of your products.

What does public liability insurance cover?

Public liability insurance covers any expense incurred by your business when a third party is harmed in any way in connection to your business. This includes-

1. Legal fees, settlements, and investigations: If your business is facing a lawsuit due to harm to a third party, this policy will cover the expenses of the attorney and the investigating officer and any settlements, if necessary.
2. Medical expenses: If the third party faces any bodily harm inside your premises or any negligence on your or your employee's behalf, this policy will cover the medical expenses incurred.
3. Personal injury: This policy also covers any legal expenses against slander, wrongful entry, and other offences.
4. Property damages: A third party might sue you for property damage. This is also covered under public liability insurance.

Public liability insurance is more limited than other insurance policies, promising more affordability but less coverage and payouts. It also does not cover professional errors, your business property damage, or any damage out of a war-like situation.

Types of public liability insurance:
1. Public liability for manufacturing units such as warehouses and godowns.
2. There is public liability coverage, especially for non-manufacturing units such as hospitals, doctors, banks, or other BPOs which are in direct contact with the general public.
3. Businesses that deal with hazardous substances are also covered under the Public Liability Insurance Act of 1991 to provide immediate relief to those harmed by accidents related to these hazardous substances.

This insurance can be extended to cover legal expenses arising out of other eventualities, including:
1. Natural calamities
2. Transportation of treated effluents
3. Sudden and accidental pollution

Unexpected financial losses are the biggest concerns for any business owner. There is a constant fear of an unforeseen accident happening to the third party and their financial impacts. This policy reduces a lot of the stress on business owners. Do proper research of public liability insurance prices to understand the rate and payouts insurance policies can provide you.

Click HERE to know more about public liability insurance prices.

Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.