Public Liability Insurance

What is Public Liability?

Public liability is an aspect of tort law, which specifically focuses on civil wrongdoings. An applicant, or the injured party, in a product liability case will typically file a lawsuit to sue the respondent (the owner or occupier) under a common law basis of negligence and/or damages.

Public liability claims are typically successful when the applicant can show that the owner or occupier was responsible for causing an injury to the individual. In general, a public liability case attempts to evaluate whether the owner of a business or occupier of a property breached their specific duty of care to irrefutably precipitate some form of wrongdoing or injury to the applicant.

The duty of care in a public liability case refers to the standard by which one would expect to be treated while in the care of another. Although this term is somewhat simple, when evaluating it through a legal scope to determine whether a party is at fault of precipitating an injury, it becomes highly complex and somewhat ambiguous.

When a breach of duty has been established, any legal action brought in a common law court would most likely be successful. Based on the circumstances of the case, meaning the injuries suffered and the losses experiences by the applicant, the court will award a financial compensation package as a reimbursement for the monies and time lost as a result of the injuries sustained.

What is Public Liability Insurance?

In a general sense, liability insurance is an aspect of the general insurance system of risk financing to protect the insured party from the risks of liabilities realized by law suits and similar legal claims. The insurance policy protects the insured party in the event that he or she is sued for claims that are labeled within the coverage of the insurance policy.

Using this general definition of liability insurance, it must be understood, when attempting to understand what public liability insurance is, that industry and commerce are based on a range of activities and processes that carry the potential to affect a number of third parties (sub-contractors, trespassers, members of the public etc.) in a way that directly results in physical injury.

Public liability insurance protects an organization from the legal fees and costs associated with a lawsuit. For example, if a small business does not shovel their sidewalk and an individual slips on ice and breaks their wrist, the person may sue for negligence and recover whatever costs are tied-into his or her injury. This is a relatively small and inexpensive example of how a small business or organization can face legal costs.

As a result of their invariable impact, the majority of organizations or companies, although not compulsory in all states, will purchase a public liability insurance policy. The reason why the majority of organizations, even small businesses, will secure a public liability insurance policy is because in the event of a legal action, out-of-pocket costs associated with legal fees, a defense and a settlement can far exceed premium costs. In some extreme cases, the costs associated with a claim could be enough to shut down a business.

Businesses must consider all potential exposures to risks when deciding whether public liability insurance is necessary, and if so, how much coverage provides the most cost-effective protection.

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