Public Liability Insurance

When someone starts a business, he/she shouldn’t deny the probable risks that the business may expose to. For instance, a customer visiting your office slips and breaks her ankle due to a wet floor, leading to hospitalisation. What if this leads to a liability arising out of injury? That’s why having your business insured with Public Liability Insurance is necessary.

Let’s consider what is public liability insurance. Public Liability Insurance offers the optimum protection to the business in case any third party liability arising out of injury or property damage. Public exposure or liability affected by law can destroy the promising future of your business. With this insurance policy, you can mitigate that financial burden on you.

Why is Public Liability Insurance Required?

Public liability insurance is specially designed for the companies or individuals who may be held liable or legally responsible to pay for the injury or other related damages caused to a third party. This is especially recommended for professional organisations like hospitals, BPOs, doctors and even business owners. For instance, if your faulty product causes damage or injury to someone else, you may be sued for the loss caused. Acquiring public liability insurance will cover by ensuring legal costs.

Types of Public Liability Insurance

Although the types of public liability insurance India is not properly defined, in most of the countries, the following types of public Liability policies are offered:

  • Public Liability for Godowns, warehouse or other manufacturing units
  • Public Liability for non-manufacturing units such as BOPs, IT firms, Hotels, Restaurants, schools, clubs etc.
  • Public Liability Act - Business units that are dealing with hazardous substances as per the Public Liability Act, 1991

Public Liability Insurance Coverage

The coverage under public liability insurance is extended for industrial risks, non-industrial risks, all business units dealing with hazardous substances etc. to enjoy more comprehensive protection this policy can be extended to cover other legal expenses arising out of

  • Natural calamities
  • Sudden and Accidental Pollution
  • Transportation
  • Carriage of treated effluents etc

What’s not Covered by Public Liability Insurance?

Any damage due to following substances will not be covered:

  • Damage arising out of war or war-like situation
  • Intentional or deliberate damage
  • Ionizing radiations
  • Damage arising out of fines, punitive, penalties, or exemplary damages

Benefits of Public Liability Insurance

It might not be a statutory legal requirement, but it is a necessary buy to protect the business from a monetary drain arising out of a lawsuit. In any point of time, if your business is sued by a third party, the insurance will cover the entire legal expenses on you. You should consider this insurance if your business comes into contract with third parties on a frequent basis.

As you can’t predict an unforeseen to happen, the best way is to be prepared. Same goes to your business as well, You can’t predict even a small risk can cause huge monetary loss. Even your wet floor could be a medium of your client to fall over and be injured. If it happens then the injured party can claim for liability compensation. You’ll require legal advice to defend the case and it will cost you a fortune, even if you win the case. This could be catastrophic for small business which has just started now. Having liability insurance will ensure that your business is free from such liability expenses, in case anything goes wrong.

Ever profession where they have to encounter or deal with the general public should buy this insurance, which ensures in case an accident were to happen, the business would be able to payout the liability requesting by the claimant.

How is Sum Insured Decided for Public Liability Insurance?

 The sum insured of your public liability insurance is decided based on the exposure specified by you. Initially while buying the plan, you are required to fix two indemnities:

  • Any One Accident (AOA)
  • Any One Year (AOY)

AOA and AOY must be in the ratio of 1:1, 1:2, 1:3 or 1:4. This policy can’t be issued with unlimited liability, however.

How is Premium Decided?

While deciding the premium for liability insurance, the insurers take various factors into consideration. The foremost thing that severely affects the premium of public liability insurance is the amount of risk your business is exposed to. Higher the risk, higher the premium you will pay or vice versa. Other factors include the claim settlement history of the insured, how the insured approaches towards certain risks, business record etc.

How to buy Best Public Liability Insurance

To avail the right policy you shouldn’t deny online comparison. As you already know that insurance can be bought either online or offline, most of the people prefer go for online insurance due to scarcity of time. Online insurance helps you find the right deal through its comparison feature, where you can compare the plans on certain parameters like CSR of the insurance company, premiums, coverage offered etc.

How to Claim Public Liability Insurance

There is no standard set for claiming public liability insurance. The claim process may vary insurer to insurer. Usually, whenever a claim is registered, the insurer appoints a surveyor to investigate the claim and estimate the damages. In case of liability the court decides the liability amount and the same will be settled by the insurance company. This requires all the supporting documents to be submitted without fail. However, liability claim is completely different from the other claims as it involves the judgement of court.

 

Q:

What do you mean by Public Liability insurance?

Ans:

Public Liability insurance is one of the types of Liability Insurance under the category Business insurance. It offers financial protection to the business/individual if any liability arises or if the business is sued by a third party. It bears the legal expenses to be borne by the insured while consulting a legal advisor as well.

Q:

What are the exclusions of public liability insurance?

Ans:

No coverage will be provided for intentional damage and libalities that are contractual under public liability insurance.

What are the types of libaility inusrance available in India?

The types of liability insurance offered by various Indian insureance providers include:

1. Public Liability Insurance

2. Third Party Liability Insurance

3. Professional Liability Insurance

4. Product Liability Insurance

5. Employer Liability Insurance

6. Liability for Industrial Risk

Q:

What are the insurance companies in India offering public liability insurance?

Ans:

The insurers offering public liability insurance include: TATA AIG, HDFC ERGO, Bharti AXA, ICICI Lombard etc.

Q:

Can doctors avail a liabilities insurance? If so, what kind of liability is designed for them?

Ans:

Yes, a liability insurance is essential for the frofessionals like doctors. They can opt for Professioal Liability Insurance which cover them in case of a lawsuit.

 

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