Business

Legal basis for public liability insurance

PUBLIC liability is another form of liability insurance whose intention is to protect the insured’s legal liability against injury or death or property damage to third parties.
The legal liability may arise in tort, contract or statute.
A tort is defined as a civil wrong. It arises from a breach of duty owed to others. For example, a member of the public who visits any business place is owed safety.
They need protection against any harm or injury, which might be caused by the activities of the business.
The principal torts include negligence, trespass, strict liability, nuisance, defamation, and statutory liability.
Negligence deserves special mention here as it the primary source most claims under public liability.
It is the omission to do something a reasonable man would do or doing something a reasonable man would not do.
For example, if a business place has its floor kept wet and slippery, it is a danger to the visiting customers.
Such an act is something a reasonable person would not do, i.e. allowing customers to step on a wet and slippery floor.
Therefore, if a customer is entitled to step on the floor and they slip and injure themselves, then the customer has a legal basis for seeking compensation form the business.
A reasonable person would not leave the floor wet and slippery and allow customers.
Another source of insurance claims on a public liability policy is a nuisance.
It is defined as a wrong done to a man by unlawfully disturbing the enjoyment of their property, or in some cases prevention of exercise of their common right.
A nuisance affects the reasonable comfort and convenience of someone.
Nuisances may be supported by statute.
For example, the Environmental Protection Act 1990, under section 79 outlines several statutory nuisances such as any premises in a state that puts at risk the health of another person.
Defamation is another possible cause of liability. It involves injury to a person’s feelings arising from the interference with their reputation.
Such interference should be in the form of a statement which lowers the estimation of a right-thinking person.
Defamation may either be libel or slander. The difference between the two is that libel is in a permanent form such as writing, printing, broadcast etc while slander is non-permanent. Slander is actionable only on proof of special damage.
Strict liability occurs when someone is involved in a damage-inducing risk; negligence does not need to be proved.
For example, in jurisdictions with strict liability on a third motor party policy; injuries caused by motorists to third parties such as pedestrians, do not require to prove that the driver was negligent.
All that needs to be established is that a motor vehicle injured a third party, and damages will be awarded.
Public liability seeks to indemnify the insured against injury to or illness or disease of any person affected in the course of doing business.
The policy also compensates loss or damage to material property of third parties in connection with business activities.
The cover also includes obstruction, loss of amenities, trespass, and nuisance.
The occurrence should be during the period of insurance and in connection with the business.
However, it is essential to underscore the fact that the policy only responds where there is injury or damage, and where there is a tort.
A public liability policy may have several extensions such as ‘tool of trade’, cross liabilities, employees’ and visitor’s property, un-attached trailers, products liability, extended reporting, and additional insureds.
The ‘tool of trade’ extension seeks to cover mechanically propelled vehicles against third party liabilities.
Inclusion of this extension provides for any vehicle or plant, being used as a ‘tool of trade’.
For example, a grader whose main activity is on-site may cause injury or damage when moving on a public road.
With ‘tool of trade’ extension, it means that when the grader is being driven on a public road, it will be covered against third party liabilities.
Cross liabilities arise when more than one insured is included in the policy. The policy will indemnify each insured separately and not jointly.
Further, any such liability shall be treated independently, i.e. as if the policy had been issued separately to each insured.
However, the total limit of liability shall not exceed the insured limit stated in the schedule.
A public liability policy is an effective form of insurance which businesses should consider to protect themselves against possible third party legal liabilities in the course of their business activities.
It is also essential to have adequate limits of liability, reflecting possible damages. There are many other provisions in this form of insurance; today’s article was meant to give a synopsis.
Please contact your insurer, broker or agent for specific guidance on public liability.
For comments or questions, email w.twaambo@gmail.com or webster@picz.co.zm or visit my Facebook page Webster Twaambo, Jr.



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