Public Liability – Don’t Stinge On Your Policy

It was reported in most dailies recently on the 6th January, 2013 that a deadly gas explosion at a factory in Islamabad, Pakistan resulted in three people being killed and scores injured. The blast was so great that it brought the whole building down.

In 1991, the Bright Sparklers Fireworks Factory in Sungai Buloh, Malaysia caught fire and caused a huge explosion. Twenty six people were killed and over a hundred injured in one of the worst factory disasters in Malaysia. The number of claims arising out of the explosions were enormous and millions were paid out in compensation to the employees who perished or sustained injuries.

Foremost in the minds of many businessmen when they set up factories would be to spend money on equipment and employing a workforce to produce as much as they could in order to maximise profits. Whilst some of these factory owners might consider purchasing health or life insurance for their employees, some might not or may have not realised that it would also be important to ensure that their factory and / or business is covered by a comprehensive public liability insurance.

Public Liability Insurance covers a wide spectrum of losses. Liability Insurance is typically designed to provide specific protection against a claim lodged by an aggrieved third party. It is rarely made payable to the Insured but rather to the person who sustained losses or damages due to the actions or omission  of the Insured. The Insurer’s duty could be summarised to defending the Insured and to indemnify the Insured against any claims covered under the policy.

What kind of losses does a Public Liability Insurance cover? Coverage depends on the type of commerce or industry the Insured is involved in. If an Insured is involved in the printing business, the Public Liability Insurance may be used to cover against pollution from the chemicals used and against injuries sustained by customers or invitees to the factory. If an Insured is the oil and gas industry, a Public Liability Insurance Policy would be necessary to cover them against potential million dollar lawsuits in case of an explosion or oil leak which is detrimental to the public and environment.

It is therefore important that business owners consult their insurance broker to ascertain their risks and to ensure that those risks are adequately covered by a comprehensive Public Liability Insurance Policy. Further reading here would give you more information on public liability policy.