What kinds of public liability insurance cover businesses?

Published 18 May 2018

Public liability laws help provide compensation for people who are injured or otherwise harmed due to the negligence of an organisation or individual responsible for their wellbeing.

The Civil Liability Act 2002 (NSW) outlines the legal principles that courts rely upon when deciding public liability claims. Faulty products, shopping centre trips and slips and medical negligence are all examples where a business or professional may have failed in their duty of care to an individual.

Understanding different types of insurance policy

If you are pursuing public liability compensation, the defendant is likely to be the business's insurer. Here are examples of the types of insurance that organisations purchase for these circumstances:

Public liability insurance

These policies cover the financial burden of defending a claim of negligence, as well as any potential payouts. Negligence involves the defendant failing to take reasonable measures to prevent the injury, illness or death of an individual from a foreseeable risk.

Public liability claims also protect businesses that negligently cause damage to property or, in rare cases, create third-party losses.

Product liability insurance

Businesses that supply or deliver goods may also choose product liability insurance, which hedges against the risk that their merchandise injures or kills customers.

While all policies are different, most should include cover for property damage and any psychological illnesses or distress caused due to a faulty product.

Professional indemnity insurance

This type of insurance protects professionals for negligence committed while performing their job. For instance, clients can sue their lawyer if they believe they have received negligent legal advice.

These policies also cover medical practitioners if they are accused of malpractice while providing treatment or performing procedures.

The cost of negligence for businesses

Public liability insurance isn't always mandatory for Australian businesses, although some industries have rules specifying what coverage is required to operate.

Compensation payments can be significant, particularly if the injuries sustained are serious, which is why many organisations choose to purchase insurance even when policies aren't compulsory.

Permanent disabilities, whereby the individual is unable to ever return to work, may incur lifetime costs for lost income and superannuation, medical treatments and future care. Some cases can result in plaintiffs receiving compensation running into the hundreds of thousands or even millions of dollars.

This is why it's crucial to contact an expert personal injury lawyer as soon as possible if you are injured due to someone else's negligence. For a free consultation with Gerard Malouf & Partners Compensation, Medical Negligence & Will Dispute Lawyers, please get in touch here.