Public liability

Introduction

Public liability insurance covers any damages or losses sustained by any third party that arises when it comes into contact with the insured business. The third party can include customers, visitors, passers-by, contractors and the general public. Businesses have a duty of care to take reasonable action to avoid third party injury, death, loss and property damage. Consequently, businesses open to the public are particularly vulnerable to these types of incidents, which can lead to expensive public liability claims.

Typically, public liability insurance covers:

• Loss or damage to property, including the loss or damage to a third party’s property in the business’s care (i.e. a vehicle in a private car park). This also covers a third party’s property if it is damaged while performing a service (e.g. a mechanic repairing a car).
   
• Legal costs arising from the defence or settlement of a claim.
   
• Injury to a third party, e.g. when a customer or member of the public walks onto a business premises and slips or is electrocuted or has something fall on them. The insurance also covers first aid expenses during the injury occurrence, pain and suffering, economic and non-economic loss including loss of future income, bereavement, medical rehabilitation and living assistance costs.
   

The type, location, size, risk and previous claim history of a business directly affects the level of public liability insurance that is required and the premium payable. For example, a white water rafting adventure company holds a greater risk of injury to customers than an accounting office. There are also state-specific public liability requirements that vary throughout Australia. As a general rule, public liability is not compulsory but is often mandated for specific licensed occupations or by industry regulatory bodies.

There are also different types of public liability insurance:

• General and tenant insurance which covers the business if a member of the public or a tenant is injured on the property.
   
• Product liability insurance which covers a business from damages resulting from their products.
   
• Defective workmanship liability which covers injuries that result from manufacturing defects.
   
• Contractors liability, which is specific to businesses involved in the construction industry.
   

Cover normally starts at $5 million and can range up to $20 million.

Some events are often excluded from public liability insurance:

• An employer’s responsibility for injured workers, which is covered through workers compensation insurance.
   
• Punitive damages, which are the additional damages awarded by a judge if the court deems the business’s behaviour was exceedingly negligent.
   
• Expenses associated with a product recall.
   
• Gradual pollution caused by substandard infrastructure such as rusting pipes and leaking tanks that contaminate groundwater. These type of events are normally covered by a specific environment impairment insurance policy or pollution liability policy.
   
• Asbestos - It is possible to obtain a separate asbestos insurance policy for this contingency if it is deemed a risk, e.g. a business seeking to undergo renovations to an older building that is likely to contain asbestos within the walls and ceiling.
   

At the bottom of this profile are brief details of a number of the experts that Expert Experts represents. Call our office to discuss your requirements and to obtain a recommendation that suits your needs and budget.

What Expert Evidence

Experts in public liability insurance can give an opinion on the reasonableness of the clauses in the policy contracts, the level of the premium, and on the many issues that can arise if a claim is disputed in court. Experts will be familiar with the principles of duty of care, allocation of fault, and estimating the losses, damages and medical costs. Most public liability claims arise out of negligence and our experts will be aware of recent reforms to the industry on this issue.

Sample Reports

For some fields of expertise we have some sample sections of de-identified reports. Please contact our office if you are interested in a sample.

Cost

The overall cost of expert opinion depends on the services required. Some of the key factors that affect the cost of advice include:

• The need for a view or inspection of a location
• The quantity of documentary material to be reviewed
• Whether there are reports of other experts to be reviewed and commented on in detail
• Whether there is a need for conferences with the expert either in person or by telephone/Skype

Relevant Articles Public liability compensation laws at centre of reform push

A nationwide push is underway to change compensation laws for those who slip or fall in public places, with the aim to reduce insurance premiums.

Relevant Cases ZURICH AUSTRALIAN INSURANCE LIMITED -v- METALS & MINERALS INSURANCE PTE LTD [2007] WASC 62

This case in the construction industry was concerned with the entities who were liable where sub-contractors were injured on a worksite.