Public & Products Liability

Public & Products Liability (also known as Broadform Liability) protects against your legal liability to customers/ clients, suppliers and the community, i.e. third parties (not employees) for:

• personal injury (including death), and
• loss of or damage to property;

arising out of the business’ activities and products. If you are held accountable for grievances, this can negatively impact your reputation and finances.

This cover aims to protect an insured’s business for the legal costs, the costs of defending the action and cost of compensation to a third party, resulting from death, injuries or property damage incurred as a result of the provision of the insured’s goods, or the performance of the insured’s services.

Public Liability

Public liability is a term used to describe liability to the public, i.e. any third party to your business. Is is defined in a policy as: “Third party personal injury or property damage resulting from an occurrence in connection with the business other than an occurrence in connection with the products of the business after they have left the Insured’s possession or control.”

Examples:

• A customer slips on a liquid spill on your premises - which should have been cleaned up but wasn’t - and suffers an injury as a result of their fall;
• A member of the public walks past a construction site and is hit by a falling piece of debris, causing injury;
• Your premises catches fire and your neighbours cannot access their premises for a number of days because of the fire. As a result, your neighbours are unable to conduct their business. You also had customer goods on your premises that were in your custody for repair – these goods were also destroyed.
   

Products Liability

The term Products Liability is introduced for the purpose of applying a limit for an occurrence that is caused by or arises out of any product of the business. It is usually defined as: “Your legal liability in respect of personal injury or property damage caused by or arising out of any products or the reliance upon a representation or warranty made at any time with respect to such products; but only where such personal injury or property damage happens after physical possession of such products has been relinquished to others”.

What is considered a product will be defined in the policy and is usually anything manufactured, grown, extracted, produced, processed, constructed, erected, installed, assembled, altered, modified, repaired, serviced, treated, sold, bottled, handled, supplied, distributed, imported or exported by the Insured in the course of the Insured’ business, including any packaging, labelling, advice, warnings given or omitted in connection with any of the Insured’s products.

Examples:

• You are a supplier of eggs and you supplied them to a restaurant. The eggs are spoiled, the restaurant does not know that it they are spoiled and uses it in their menu food items. After they have made their menu food items, they become aware of the contamination and all of their menu food items have to be destroyed as a result of your spoiled eggs;
• You import components manufactured in China direct from the manufacturer to make your product, the components are found to contain high levels of lead which are unsafe for human use. Because the manufacturer is not an Australian business and is not represented in Australia the responsibility for the lead contamination will be your responsibility. This responsibility is given to you by the Australian Consumer Law Act.

What is covered?

Depending upon the type of policy taken, the triggers for this coverage to apply are personal injury or property damage, and in some instance pure financial loss.

Personal Injury

Personal Injury usually means:

• bodily injury, death, sickness, disease, disability, shock, fright, mental anguish and mental injury;
• false arrest, false imprisonment, wrongful detention, malicious prosecution and humiliation;
• wrongful entry, wrongful eviction or other invasion of right of privacy; and/or
• assault and battery committed by the Insured for the purpose of preventing or eliminating danger to persons or property, resulting from an occurrence.
   

In the event of Personal Injury arising from latent injury, latent sickness, latent disease or latent disability, that Personal Injury shall be deemed to have occurred on the day the injury, sickness, disease or disability was first medically diagnosed.

Property Damage

Property Damage is defined as in the event the Insured becomes legally responsible to pay compensation for property damage resulting from an occurrence/incident in connection with the Insured’s business. Property Damage usually means any physical loss, damage or destruction of tangible property including the resultant loss of use, or loss of use of tangible property which has not been physically damaged or destroyed, provided such loss of use is caused by or arises from an occurrence.

In the event of a claim arising from latent damage or from the exposure of tangible property to gradual deterioration and eventual damage, such Property Damage shall be deemed to have occurred on the day such deterioration or damage was first discovered.