What does public liability insurance cover?

The wordings cover amounts you become legally liable to pay as compensation for:

▹ Personal injury: defined broadly to include bodily injury, death, illness, shock and mental anguish, and in the wordings we read also false arrest, wrongful eviction, defamation and discrimination.

▹ Property damage: physical damage to or loss of tangible property, including loss of use.

▹ Advertising injury: liability arising from your advertising.

The event (an "occurrence") must happen during the period of insurance, within the territorial limits, and be connected with your business. Source: public and products liability wordings, insuring clauses.

The wordings extend to liability from your products: goods you made, sold, supplied, repaired or labelled, once they have left your control, including their packaging, instructions, warnings and design. Source: public and products liability wordings, products cover.

Legal costs of defending a claim are covered as well as the compensation. In one wording, defence costs incurred with the insurer's prior written consent are paid in addition to the limit of indemnity, but stop once the limit is used up by judgments or settlements. Source: public and products liability wordings, defence costs clauses.

▹ Moving an obstructing vehicle (one wording): liability from moving a vehicle you do not own that is blocking your premises or worksite, by a licensed driver using the owner's key. Damage to that vehicle is not covered.

▹ Property in your care (one wording): limited cover for premises you lease or hire, vehicles in a car park you run without charge, and employees' and visitors' belongings. Other people's property temporarily in your care is covered up to the amount on your schedule, or $500,000 per occurrence if none is stated.

Source: public and products liability wordings, extensions.

Common exclusions in the wordings we read:

▹ Aircraft, hovercraft and larger watercraft (over 15 m in one wording, over 8 m in the other)

▹ The cost of fixing or redoing your own faulty work

▹ Damage to the part of property you are working on

▹ Registered vehicles you own or control (covered by motor insurance)

▹ Injury to your own employees (covered by workers compensation)

▹ Pollution and contamination

▹ Asbestos

▹ Cyber: damage to or loss of function of computer systems

▹ Certain advertising injury, such as incorrect prices and trade mark infringement

Source: public and products liability wordings, exclusions clauses.

The policy pays up to the limit of indemnity on your schedule. Extensions generally sit within that limit rather than on top of it, unless a separate sub-limit is stated. Source: public and products liability wordings, limits clauses.

Limits and conditions differ between insurers, and retail and broker-arranged policies can differ too. Check the policy wording and schedule for your own policy, or ask your broker.