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Home » What is the difference between liability and public liability insurance?

What is the difference between liability and public liability insurance?

Liability insurance is a crucial aspect of risk management for businesses, providing financial protection against claims resulting from injuries or damages caused by the actions of the insured party. One of the distinctions within the realm of liability insurance is between standard liability coverage and public liability insurance. Standard liability insurance typically encompasses claims arising from a variety of scenarios, such as property damage or bodily injury caused by the insured individual or entity. On the other hand, public liability insurance specifically addresses claims made by third parties who are not directly involved in the operations of the insured business.

Public liability insurance is designed to safeguard businesses against claims brought forth by members of the public, including customers, clients, suppliers, or even bystanders. These claims may arise due to accidents or incidents that occur on the business premises or as a result of its operations. For instance, if a customer slips and falls in a retail store or sustains an injury due to a product defect, they may file a claim against the business for damages. In such cases, public liability insurance provides coverage for legal expenses, compensation payments, and other associated costs incurred by the business in defending against or settling these claims.

In contrast, while public liability insurance focuses on third-party claims from non-employees, employers’ liability insurance addresses injury claims made by individuals who are employed by the insured business. This type of insurance is typically mandated by law in many jurisdictions to protect employees and provide them with recourse in the event of work-related injuries or illnesses. Employers’ liability insurance covers the costs associated with legal proceedings and compensation payments to employees who suffer injuries or illnesses during the course of their employment. By distinguishing between public liability insurance and employers’ liability insurance, businesses can ensure comprehensive coverage against a wide range of potential liabilities.

(Response: Public liability insurance covers claims made by third parties, while employers’ liability insurance covers injury claims made by employees.)