Public Liability Insurance

This is a big subject and one which cannot be covered in these few paragraphs. What I have attempted to do is simplify the subject and dispel some of the myths.
The disclaimer.   The topic is provided more for interest rather than education, do not rely on any interpretation of this information but if required seek independent and specific advice from a qualified professional.
Domestic personal Liability cover is usually bundled with domestic home and contents insurance and most insurance companies provide an upper limit of $30 million. It is intended to protect you against loss or damage to the property of others and personal injury (to others) for which you have been found legally liable. The last phrase is the most important part of the sentence – for which you have been found legally liable.

Should someone hurt themselves on your property or from any other cause such as tripping over your suitcase at an airport, and they claim damages against you, a series of events usually occurs. You must never admit liability as by doing so, you may well be making an admission of personal liability and have to pay the damages if your insurance company successfully challenges the claim.
If an event resulting in loss occurs on your property or is caused by you anywhere in Australia for which you believe a claim is likely, the first part of the process is to notify your insurance company of a potential claim. Your insurer will obtain a statement of events from you and if a claim doesn’t eventuate then the matter drops and no harm is done.
In the event you are served with a claim for compensation for damages, the papers should be immediately sent to your insurance company who will invoke their normal procedures.
If on the information available to them it is likely that the claim will be successful, the insurer will attempt to settle out of court. The reason for this is obvious given that in the past magistrates have allocated rather excessive compensation packages to claimants resulting in commensurate increases in insurance premiums to cover the costs. If the insurance company considers that the loss was not caused by any negligence on your part and you have taken all reasonable precautions to prevent such an accident or loss, then they may decline the claim and let the matter proceed to court.

Remember that the claim is a legal liability claim. That is, you have to be found legally liable for any loss, damage or injury in a claim made against you.  This liability could arise by you admitting liability (either rightly or wrongly) or as determined by a court of law. If the insurance company challenges a liability claim then the claimant is confronted with the possibility of the court denying their claim which may mean the claimant has to pay for court costs, their own legal expenses plus the usually considerable legal costs of the defending insurance company. This can be quite significant so any such actions should only be entered into with careful deliberation.

Claims I have been involved with include:

A senior lady had her leg cut when a shop sandwich board sign was blown over by wind. After 4 months, the wound became infected requiring medical treatment. The insurer paid her $4,000.

A tree blew over a back fence demolishing a clothes line as well as the fence. The insurer paid $2,880 for the removal of the tree, replacement of the line and the repair of the fence.

A boy kicked a football through the neighbour’s window damaging an expensive vase. The insurer paid for the repair of the window and the replacement of the vase.

Stated and excluded cover

An insurer’s Product Disclosure Statement may well exclude certain liability covers. A basic precept is that a statement made in a sign, notice, word of mouth or a contract cannot negate a person’s common law rights.
There are many more complexities associated with public liability insurance too numerous to mention here but I would be happy to answer any specific questions on the understanding that my answers will of necessity be more general than absolute in a legal sense. Feel free to give me a call during business hours on 03 6235 5528.
Keith Lello