What is Public Liability Insurance?

Public liability insurance is a type of business insurance that can cover third party claims against your business for bodily injury and resulting medical expenses, damage to property, and other losses. If a member of the public is injured or sustains losses due to your business, its employees, or while on the business property, the business owner or company could be held liable for the costs.

How Public Liability Insurance Works

This form of business insurance can be purchased as a standalone product or can form part of your insurance portfolio. It can cover the cost of claims made against the business for situations where the business is held liable for damages, losses, injuries, or even deaths.

The company can be held liable for events caused by the staff and employees, directors, and anyone representing the business. It can also include events that occur on your business premises. You can ensure you have enough cover by assessing risks.

You can also discuss your coverage with your insurer at length to ensure there is enough cover for any possible situation that may arise. The plan you choose should ideally cover legal expenses and settlement amounts. Before you sign the policy, you can read through the policy wording to make sure you understand the scope of your cover.

Every policy will have exclusions and other terms and conditions. For example, they may exclude cover for claims where the company wilfully caused damage or loss to persons of the public. They may also require you to take precautions.

Is Public Liability Insurance Compulsory?

In South Africa, public liability policies are not compulsory by law, but sometimes customers or clients may require public liability insurance before acquiring your services or in contracts and agreements with you.

Even though you don’t need this type of insurance policy by law, it is one an important type of business insurance. It is a good idea for most business types to get this kind of cover.