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:
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 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.”
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.
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 usually means:
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 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.