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What is Public and Products Liability insurance?

4 Oct 2016

However well designed our business practices or product specifications are, mistakes can happen.

No business plans for their business operations or products to cause injury or damage to third parties, however, should the worst happen Public and Products Liability insurance will allow your business to continue operations and support the cost of such a claim.

What does Public and Products Liability insurance cover?

A comprehensive public and product liability policy will provide cover for any claims of bodily injury or other physical injury, personal injury, advertising injury and property damage as a result of your products, premises, or business operations.

As a safeguard against liability, the policies allow you to continue your normal operations while dealing with real or fraudulent claims of negligence or wrongdoing.

Liability policies also provide cover for the cost to defend and settle claims.

The following are some other areas that typical liability policies may cover:

  • Personal and Advertising Injury – Protects against offences made by you or your staff during the course of business, such as libel, slander, disparagement or copyright infringement in advertisements.
  • Defence Costs – Provides cover for legal expenses for liability claims brought against your business, regardless of who is at fault.
  • Medical Expenses – Provides cover for medical expenses if someone is injured on your premises or by your products.
  • Premises and Operations Liability – Provides cover for bodily injury and property damage sustained by others on your premises or in conjunction with your business operations.
  • Products Liability – Provides cover for bodily injury and property damage sustained by others as a result of your products.

Looking to review your business insurance?

What Level of Cover does your Business Need?

The amount of cover that your business needs depends on three main factors: your perceived risk, where you operate your business and the type of products that you manufacture.

Your Perceived Risk

This is where insurers will consider the amount of risk that is associated with your business practices and its functions.

For example, say your business manufacturers or deals with heavy machinery on a daily basis, your cover needs may be significantly more than a business whom manufactures children’s soft toys.

An insurer will review your business practices and assess the risk that your operations have and issue respective cover levels on that perceived risk.

Where your business operates

This factor is self-explanatory, for example should your business operate in a busy area, you will require more public liability than say a rural setting.

This factor also includes your business operations, for example a sign builder, whose business requires them to visit shops onsite to fit signs, this would require more public and personal injury than an off limits manufacturer whose business is closed off from the public.

Types of Products you Manufacturer

Again the higher risk of the products you manufacturer the more liability cover you will need.

Typical Exclusions and Limitations

Typically an Insurer will set an excess for each claim, which will vary depending on the level of cover provided. This excess will require the Insured to pay out a small amount towards the cost of a claim.

However, the detail of which will be fully explained to you before you take out your insurance policy.

Injury to your own employees or to your own property will not be covered under Public and Products Liability insurance. These types of claims will be covered under your Employer’s Liability insurance and adequate Property Insurance.

Acts of War, Terrorism, or Nuclear risks are typically not covered under this liability insurance.

Ask us for more information

Johnston Park McAndrew are experience in arranging not only the most competitive of insurance policies, but the best policy for you and your business’s needs.

We offer full support and guidance including documents and templates to implement company policies that will help reduce your risk of a claim arising, along with getting to know every aspect of your business to fully understand your needs.

We pride ourselves on being an extension to your business offering expert advice and knowledge wherever needed.

We are Johnston Park McAndrew – Your Advice Led Commercial Insurance Broker

Author: Jake Basterfield – IT Apprentice
Credits: “Cover Overview: Public/Products Liability Insurance” (Zywave, inc. 2016)


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