Public liability insurance is a form of general insurance that offers financial cover to protect a policyholder from for financial damages payable to a third party in case of injury, disease or death. The policy also covers damages caused to another’s property because of your business. This insurance policy also covers legal fees or other expenses that a policyholder may have incurred while defending claims filed by a third party. However, a public liability insurance policy does not cover contractual liabilities or intentional damages.
Public liability insurance is mandatory for owners, users or transporters of substances that can prove to be hazardous to the environment. Before buying a public liability insurance policy, one must check public liability insurance quotes provided by insurance companies.
Public Liability Insurance: Factors Affecting Premium
A company bases the premium for public liability insurance on:
The type of business.
The business’ activity level. While for most businesses the activity level can be based on the turnover, other factors can also be used. For example, premiums for a hotel might be calculated on the number of beds provided to reflect the number of guests.
The type and amount of cover one requires.
Public Liability Insurance: Certain Facts
There are few essential facts about public liability insurance that one must know:
The claim payment is usually not handed to a policyholder but to the person who has suffered damages as a result of the policyholder’s business.
An insurance company can defend a policyholder when a claims lawsuit is filed against him/her.
This insurance policy is critical when your business may expose your customers to potential dangers or risks.
Businesses, associates and clients are becoming aware of the importance of this policy. They are ensuring that both the parties are insured to handle public liabilities before they initiate any project with each other.