Public Liability Insurance ensures that companies are covered in the event of a lawsuit. The lawsuit may originate from a visitor, trespasser, employee or subcontractor. Any transaction that requires direct contact with the public in any capacity may require public liability insurance. The customer can sue the business if something on the property causes physical harm to the person or the customer’s property.
If the claimant successfully wins the lawsuit, then public liability insurance would cover all related expenses. The insurance will cover all legal fees associated with the lawsuit and medical expenses that may originate from the lawsuit. Other costs and expenses may also be covered.
Research for this type of case may be quite expensive to disprove negligence. Many companies may deplete their entire revenue profits trying to pay any settlements and legal fees. This may cause an owner to lose their entire company. Public liability insurance requires a small fee compared to the massive expense that may result from a lawsuit. Some lawsuits will result on the company’s complete demise.
The Duties of the Insurer
The insurers that issue public liability have several duties:
The Duty to Defend
The insurance company has the obligation to defend when they are sued by the claimant. After a complaint is filed, the insurer can seek judgement because of no coverage. They can also defend the claim or refuse to defend the claim. In-house lawyers may be used to determine if the claim is valid and what, if anything, will be paid out in the claim.
The Duty to Indemnify or Pay the Claimant
Once the lawsuit is deemed worthy, the insurer has the obligation to pay for all related legal costs, including costs for research, costs for legal counsel and costs for experts to verify the claim. The insurer must pay medical costs of the claimant, as well as, pain and suffering. The insurer must pay the claimant the agreed settlement up to the specified policy limit. Any other remaining settlement will be the responsibility of the insured party.
The Duty to Settle Claims
If the settlement demand is equal or greater to the demand of the insured party, the insured party is more likely to enter a trial to avoid settling the claim at the policy limit. If the case goes to trial, the insured party may have a settlement far in excess of the settlement offer. If the case is settled, the insurer will settle the amount up to the policy limit and will not owe any out-of-pocket expenses.
The Types of Claims
The insurer may cover a variety of claims, including slips, trips and falls. These types of injuries may comprise a majority of claims. The claimant may fall on a slippery floor or fall down a flight of stairs. Both of these types of injuries are covered by a company’s insurance.
The insurer may also cover stress and anxiety cases that occur from extreme circumstances such as a store robbery or a protest. The settlement will be determined by a team of experts based upon how significantly the event impacted the employee or visitor’s life. Negligence must be proven in order to settle the case.
The insurance will also cover elevator damage, water damage or any other damage that may occur from negligence. The company may damage a pipe or wire while on site that may cause damage to property. The company will cover any expense related to this incident.
Falling objects may damage a visitor’s property, such as a vehicle or building. The insurance covers damage to property caused by unfortunate or accidental events. Even natural occurrences, such as lightening are covered. Hurricanes, tornado’s and floods may be covered under this policy or another.