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Monday, 20 October 2014


Various organizations and businesses carry out a wide range of activities that have potential impact on third parties including customers, visitors and members of the public. The impact of business activities on third parties can result in lawsuits from the affected parties bringing unexpected expenses to the organization and threats to its finances.

1.0.    What is Public Liability Insurance?
Public liability Insurance provides protection against your legal liability for injury to third parties or damage to third party property. It covers your business for damages payment and legal costs for bodily injury to third parties and damage to third party property caused by negligence in the course of your business activities. It covers claims from members of the public, visitors, passers-by, bona fide sub-contractors both on your own premises and at third party premises where you or your employees work.

2.0.    Standard Exclusions
Public liability Insurance, like most insurance policies, does not cover all risks. Below are some risk exposures that are ordinarily not covered under Public Liability insurance.
(a) Liability resulting from pure financial loss, i.e. where there has been no injury or damage to a third party.
(b) Bodily injury, death or damage to the property of any employee of the insured. This is excluded because the risk is covered more specifically by employee liability insurance, which we shall look at shortly.
(c) Liability for loss of or damage to property owned or in custody of the business or insured. Recall that we stated earlier that liability policies pay compensation to third parties only.
(d) Most Public Liability insurance policies exclude gradual pollution damage and only cover pollution damage caused by sudden and unforeseen events.
(e) Fines and penalties: Fines and penalties are often excluded from insurance policies because insurance does not support or encourage going against the laws of the state.
(f) Excess: This is the first part of every claim or loss borne by the insured and it is either expressed in a percentage of the claim or in a certain monetary figure

3.0. Extensions
Notwithstanding the major exclusions itemized above, public liability policies can be extended to cover certain other risks upon the insured’s request. Some of these risks are as follows:
3.1. Strike, Riot, Civil Commotion: Here, the liability of the insured is extended to cover accidental bodily injury or accidental property damage to any third party occurring at specified premises directly caused by strike, riot and civil commotion.
3.2. Overseas Liability: The jurisdiction covered by Public Liability insurance is usually stated in the policy. However, on payment of additional premium, the policy can be extended to cover the insured’s employees or directors against legal liability for bodily injury or property damage to any third party incurred in a personal or official capacity temporarily outside Nigeria.
3.3. Contractual Liability: The policy can also be extended to cover the insured against any claim made in respect of liability assumed by the Insured under any contract or agreement for bodily injury and property damage to any third party provided that such contract or agreement has been declared to the insurance company.

4.0. Importance of Public Liability Policy
Injuries and accidents can occur when you least expect them. Sometimes they occur as a direct result of work related activities, but more often, members of the public simply fall victim to the circumstances in which they work.

5.0. Employers’ Liability Insurance
Employers are responsible for the health and safety of their employees while they are at work. Your employees may be injured at work (for example, employees are at risk of injuries due to slips, trips, falls, accidents from faulty equipment, hazardous materials, repetitive strain injuries, etc.) or they or your former employees may become ill as a result of their work while in your employment.
Employers’ liability will not cover you against claims such as wrongful dismissal, sexual discrimination, etc.

6.0. What does Employers’ Liability Insurance Cover?
The employers’ liability insurance policy indemnifies the insured against liability at law to pay compensation and claimant’s costs and expenses in respect of the bodily injury by accident or disease to the insured’s employees for which he is liable. The policy will bear the following costs, amongst others:
1. Payment of medical expenses of the insured employee;
2. Temporary disability benefits;
3. Permanent disability benefits;
4. Vocational rehabilitation services;
5. Death benefits to dependants of an employee should the employee die from work related accidents;
6. All costs and expenses with the insurance company’s written consent.
We will conclude this article next week. Keep a date.

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