Public liability insurance is basically an insurance that provides insurance cover to a business owner against the payment of compensation for any kind of injury or damage suffered by the member of the public (or a third party) due to normal business operations or products supplied by the business. So, it basically provides insurance cover for third-party liabilities to businesses who are involved in industrial and non-industrial activities.
If your business requires you to interact with the members of the public, like clients visiting our business premises or your employees visiting your clients to deliver products or services, public liability insurance can help you run your business smoothly by protecting you against risks. While your insurer takes care of the claims from the third party and all the expenses associated with the legal process, you can go ahead with running your business without worrying about these issues.
Although holding this insurance is not a legal requirement in many countries, it is prudent to go for it as without such an insurance, your business might face costly compensation payments. Moreover, the insurance is also good for the future prospects of your business, as some trading authorities may require you to have some kind of public insurance in place.
The public liability insurance is usually available for the following businesses -
1. Manufacturing & processing facilities
2. Construction activities
3. Godowns, warehouses, and storage facilities
4. Hotels, motels, clubs, restaurants, boarding & lodging house, guest houses
5. Office, residential and administration premises
6. Educational institutions
7. Public libraries
8. Medical establishments
9. Research institutions and laboratories
10. Airport premises excluding aviation liability
11. Cinema Halls, multiplexes, auditoriums, theaters, open air theatres, public halls, malls
12. Exhibition & fairs, stadiums, pandals, amusement parks
13. Any other industrial & non-industrial and non-manufacturing activities like IT companies, BPOs, etc.
By paying additional premiums, the insurance can be extended to cover legal expenses that can result from a few other activities like:
1. Accidental pollution
3. Carriage of treated effluents
4. Defence cost that has been covered with prior consent
5. Benefit of retroactive date
6. Acts of God perils (some natural disasters)
The insurance, however, does not cover the following activities/situations-
1. Deliberate or willful non-compliance of any statutory provision
3. Ionizing radiations & nuclear group of perils
4. Injuries or damages to employees
5. Losses of pure financial nature (eg. goodwill loss)
6. Fines, penalties, punitive and/or exemplary damages
7. Losses resulting from personal injuries (like libel and defamation) and infringement of plans
If your business or company interacts with the public in any way, you should think about getting your business insured against the claims of compensation for any injury or damage suffered by the third party, due to accidents occurring in your business premises. The cost of public liability insurance can vary to a great extent depending on factors like the size of your business, the level of risk associated with the particular industry, the level of interactions required with the public, and also, you claims history.