Generally people are not bothered about what is happening around them. They are not responsible for what happens to other people because of their actions. For instance, a person maybe driving and hits another person who gets inured. In normal circumstances, the driver would not be responsible for the injured person and may provide help on his own accord but it is not a compulsion. Similarly, during the course of a business, general public may face some problems because of a product or service of the company which can hold the tradesman responsible. That is why there is a need of an insurance plan that protects the interests of the general public.
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Public liability insurance is a type of insurance which protects the public in general in the event of injuries and losses. The public has a right to demand claims from the responsible party if it is harmed in any way. So, if a person has met with an accident, he has the right to sue the driver and as for the medical expenses. Similarly, an organization will be held responsible if some product manufactured or distributed by it caused damage to the users of the product. The organization will have to compensate for the damages.
Public liability insurance also protects an individual from claims made by third party. If the person harms another person or someone gets hit by the individual in an accident and asks for compensation, then if the person has this type of insurance, the insurance company will pay for the damages or injuries. This prevents the person responsible from losses or paying a huge sum of money.
Similarly, if a businessman or a tradesman has public liability insurance, the insurance company compensates the third party which sues the businessman or the tradeperson.
This type of tradesman insurance is mandatory in most of the countries. The policy holder has to pay a specific sum of money called premium to the insurance company in exchange of the policy. The premium depends upon several factors.
These are:
- The nature of the business
- The activity level of the business
- The type and total amount of cover required by an individual.
The policy does not provide for damages that are intentional or deliberate. For instance, if the owner deliberately sets fire to the property to get the insurance amount, the insurance company will not settle the claim. When an individual or an organization demands a claim for the policy, the insurance company sends representatives to inspect the situation. Once the representatives are satisfied that the damage is not deliberate and that there is no foul play, the insurance company compensates the damages. Also the business insurance company requires that all the policy documents be in order so that there is no problem while settling the claims.
The importance of public liability insurance cannot be overlooked in by businesses and tradesman even self-employed one man bands. These days, clients make sure that the organization has this type of insurance before starting a project with it. This ensures the clients that the organization has public responsibility and also that their investment is safe. When policy claims are settled for a business or organization, the insurance company pays the amount not to the business owner but to the person or the party that has suffered damages because of the policyholder’s business. However, the company generally compensates the policy holder for legal expenses if any.
Before buying this type of tradesman insurance policy, the insurance quotes available from various companies must be checked and compared. This will help the individual or the organization to select the best tradesman insurance policy available.
Summary
Public liability insurance is a type of general insurance which provides financial security to the policy holder in the event of claims being made by a third party. This type of insurance has become very essential for tradesman and businesses these days.
