What is Public Liability?
Public liability is an aspect of tort law, which specifically focuses on civil wrongdoings. An applicant, or the injured party, in a product liability case will typically file a lawsuit to sue the respondent (the owner or occupier) under a common law basis of negligence and/or damages.
The duty of care in a public liability case refers to the standard by which one would expect to be treated while in the care of another. Although this term is somewhat simple, when evaluating it through a legal scope to determine whether a party is at fault of precipitating an injury, it becomes highly complex and somewhat ambiguous.
What is Public Liability Insurance?
In a general sense, liability insurance is an aspect of the general insurance system of risk financing to protect the insured party from the risks of liabilities realized by law suits and similar legal claims. The insurance policy protects the insured party in the event that he or she is sued for claims that are labeled within the coverage of the insurance policy.
Public liability insurance protects an organization from the legal fees and costs associated with a lawsuit. For example, if a small business does not shovel their sidewalk and an individual slips on ice and breaks their wrist, the person may sue for negligence and recover whatever costs are tied-into his or her injury. This is a relatively small and inexpensive example of how a small business or organization can face legal costs.
As a result of their invariable impact, the majority of organizations or companies, although not compulsory in all states, will purchase a public liability insurance policy. The reason why the majority of organizations, even small businesses, will secure a public liability insurance policy is because in the event of a legal action, out-of-pocket costs associated with legal fees, a defense and a settlement can far exceed premium costs. In some extreme cases, the costs associated with a claim could be enough to shut down a business.
Businesses must consider all potential exposures to risks when deciding whether public liability insurance is necessary, and if so, how much coverage provides the most cost-effective protection.