2 Common Public Liability Claims & The Way Insurance Resolves Them

Public liability claims are becoming more common. These claims affect both individuals and businesses and can have serious financial consequences. This is where having comprehensive Public Liability Insurance plays a critical role. Discover more as Dialdirect explores the most common types of liability claims and explains how insurance for businesses can assist in resolving them. 

Understanding public liability and how it differs from professional indemnity

Public liability should not be confused with professional indemnity. The former relates to insurance cover that protects against third-party injuries or losses that occur on a business’s property due to negligence or improper business operations. The latter refers to insurance coverage for professionals who offer services or advice to a third party. A Professional Indemnity policy provides cover if the professional is deemed to have caused damage or loss for a third party due to an error, negligence or inadequate standard of service.  

What is a public liability claim?

A liability claim arises when an individual outside of the policy (the third party) believes they have been harmed or suffered losses because of the alleged actions committed by the policyholder (the first party) and may file a liability claim for compensation. Public Liability Insurance provides financial protection and legal support to those who hold such policies under these circumstances. Including this type of coverage in both business insurance packages and car insurance plans is quite common.

2 common public liability claims faced by South Africans 

Public liability covers various areas, including personal injury and property damage. When analysing risks accurately, businesses in South Africa must comprehensively understand the most commonly encountered scenarios[1] they may face, whether it involves slips and falls or any other sort of liability. By obtaining suitable coverage tailored to safeguard their interests, businesses can establish robust protection against potential setbacks. These are some of the most common types of liability claims: 

1. Personal injury claims 

These claims arise when an individual sustains an injury due to alleged negligence or misconduct on the part of a business or property owner. Examples include:

• Slips and falls: such as a customer slipping on a wet floor in a restaurant.

• Animal-related injuries: like a passerby being bitten by a dog on an inadequately fenced property or premises without warning signs.

• Defamation and libel: making false statements that harm someone’s reputation and lead to financial losses.

• Car accidents and collisions: include accidents involving company-owned vehicles or those on business premises.

2. Property damage

These claims occur when a business or individual unintentionally causes harm to someone else’s property, resulting in financial losses. Some examples of property damage claims include:

• Fire and water damage: where accidents or equipment malfunctions lead to harm in neighbouring properties.

• Accidental damage to a third party’s property that could occur during a business visit: such as accidentally knocking over an expensive piece of artwork in a client's home.

• Car accidents and collisions: could occur when a third-party’s vehicle is damaged in a fender fender incident. 

To effectively mitigate risks and guarantee adequate insurance coverage, it is crucial for businesses in South Africa to understand these frequently-seen public liability claims. By familiarising themselves with these potential scenarios, businesses can proactively implement measures to diminish the likelihood of facing liability claims altogether, thereby protecting their financial and legal concerns.

The importance of Public Liability Insurance

Purchasing Public Liability Insurance is critical for effectively managing financial risks connected to third-party liability claims. By acquiring this coverage, you can gain substantial advantages, including financial protection, legal representation, support services, reputation preservation, and peace of mind. Some of the ways in which public liability can assist your business include: 

• Providing financial protection. Public liability cover will pay out for any legal compensation or settlements awarded to the defendant where the policyholder is found to be responsible for causing third-party injury, damage or loss. 

• Offering legal support. This type of insurance for businesses will also cover the cost of legal bills, including defence costs. 

• Maintaining compliance. In some cases, having Public Liability Insurance is a legal requirement or prerequisite for certain types of businesses or professions. Failing to have the proper cover could result in lost business or even penalties, exclusions, or legal consequences. Public liability cover thus plays a critical role in risk management strategy. 

• Building a good reputation. Having adequate insurance coverage will assist in building good business relationships and maintaining a brand’s reputation. Investing in the right kind of business insurance demonstrates a company’s commitment to service excellence and professionalism. 

Compare public liability insurance costs from Dialdirect  

 What can you do to ensure your financial future is protected from potential public liability claims? Apply for an online quote for Public Liability Insurance. It is crucial not to ignore the potential risks that may jeopardise your business or personal financial well-being. Taking the necessary step of acquiring suitable protection tailored to fit your circumstances will enable you to secure the peace of mind you deserve.

Sources:

[1] The Property Wheel: What’s involved in a public liability claim? 

Disclaimer: The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.