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Public Liability Insurance

If you are a member of an incorporated association or manage a business which owns or rents out lands or possesses the land in trust, obtaining Public Liability Insurance is a must. Any business organisation which manages a business that carry out its operations in such a way that affects or impacts the general public must mandatorily take out a Public Liability Insurance policy. In some parts of Australia, the law mandates Public Liability Insurances for businesses that are prone to claims by third parties for negligence. Examples of these are drivers of vehicles, those who produce products that may cause harm to people, professionals engage in the delivery of their service and those who hire people for employment.

Liability insurance is intended to present protection against third party claims. Unlike typical insurances, payment is not made to the insured under this kind of coverage. Rather, payment is made to a third person who is not a party at all to the insurance contract but who have suffered injuries or whose property is damaged in connection with the action of the business establishment.

What is Public Liability Insurance?

Public Liability Insurance is a type of policy that will shield your business or organisation during times when someone gets injured, or their properties are destroyed because of the entity's actions or an occurrence that happened on the property of the entity concerned. You or your entity's management committee must understand the implications should they fail to take out sufficient Public Liability Insurance which may include the following:

  • The assets of your incorporated association or business may be in danger if someone makes a claim.

  • Businesses entities may rebuff any dealings with your integrated association.

Although members of the incorporation association are covered by the law for any liability to some extent, this does not really offer complete protection. If by chance the incorporation association is found to have breach due care in its actions, the association may be found to legally liable by the court.

Who is responsible for insurance needs of the business?

The management committee of your organisation or business is responsible for the assessment of its needs regarding insurance and how much it needs for coverage. Technically, the management committee is legally responsible for the following:

  • Inform the members of the perils if no Public Liability Insurance will be taken out.

  • Appraise the organisation's requirements for insurance every year and give an account of the results during annual assembly.

  • Inform everyone concerned, from potential members and would be management committee members down to people and organisations that your business or organisation will be dealing with whether it is covered by Public Liability Insurance or not.

How much Public Liability Insurance should a business or organisation needs?

There are no two organisations or associations alike, no matter if they are both engage in the same field. What could be the need of one association may not be the priority of another, thus, it would suffice to say that assessing the needs of each incorporated association should be on the fore to be able to determine its insurance needs.

What do Public Liability Insurance covers?

In a Public Liability Insurance policy, the insured would have the following benefits:

  • The right to be defended

  • The right to be indemnified

  • The right to obtain claims in favour of the third party involved in case he wins in the settlement of the case

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