Public Liability Frequently Asked Questions
Do Public Liability policies provide cover for Design errors?
Most public liability policies provide coverage for claims for personal injury and/or property damage arising from negligent design error. Coverage is not however provided for claims where third party financial loss is the only result. Where design, advice and consultancy is the primary business of the insured a Professional Indemnity policy is required.
Do Public Liability policies provide protection for environmental claims by third parties?
Coverage under most public liability policies is provided for personal injury or property damage caused by the sudden and accidental discharge or release of pollutants.
Claims for personal injury or property damage arising from the gradual release over a continuous period of time including the costs of clean up and/or mitigation costs may be more appropriately insured under a specific Environmental Impairment Insurance policy.
Do Public Liability policies provide coverage for actions brought by employees?
No. Such policies contemplate claims by parties other than anyone employed by or in the service of the Insured. Protection for claims for bodily injury made by employees can be obtained under an Employers liability policy.
Do Public Liability policies provide coverage for the costs associated with the recovery, repair and/or replacement of faulty or damaged products?
No. The policy provides coverage for third party injury/damage losses only, as a result of the supply of the products. A Product Guarantee or Recall Expense policy will be required should the Insured wish to insure its own losses.
Why do Insurers require details of the clients contractual position with customers and suppliers?
One of the areas that can improve the acceptability of risk for insurers is limitation of liability by contract. If the client can demonstrate that they have restricted their liability contractually then this will generate benefits both for the insured in respect of premium savings and for the insurer in respect of any claim payment. Insurers are particularly interested in whether hold harmless agreements have been entered into, or indemnities given to suppliers as these can ultimately have the effect of limiting the insurers right of recourse against other parties responsible for the loss.
What information, other than a fully completed insurance proposal is required in order for the insurer to determine premium and scope of coverage?
Where the proposer is a professional firm or consultancy, a copy of the proposers marketing literature, business profile and standard contract conditions for the provision of professional services is required. Manufacturers, exporters and suppliers of products should provide similar information including a copy of standard conditions of sale and any agreements with distributors.
What is a “Broadform” liability policy?
"Broadform“ is a generic term for a liability insurance policy originating in the United States and introduced into the New Zealand Market in the 1970’s. Most specialist liability insurers in New Zealand provide coverage on this basis.
What is the difference between the terms bailees liability and care, custody or control?
If you have goods in your care, custody or control, then you are a bailee. As such you are strictly obliged to return the goods to the owner in good order. Current case law suggests that the lack of payment for service does not confer a lesser duty of care.
