Demystifying Public & Products Liability Insurance: Your Most Common Questions Answered
Understanding Public & Products Liability Insurance (PPL) can be quite confusing for the average person, so part of our quest to support community groups and not for profit organisations has been to provide you with some answers to your most commonly asked questions.
What Is Public & Products Liability Insurance?
A Public and Products Liability policy provides your group with an indemnity against all sums which you become legally liable to pay (by way of compensation) for personal injury and/or property damage to the public resulting from an occurrence which arises from your activities. A legal liability can arise from your negligence, or the negligence of your members, including voluntary workers engaged on behalf of the organisation, who is working in a recognised role for the group.
To put this another way if you do something, or fail to do something, then where you are negligent (e.g. you have breached your duty of care), and someone is injured, or their property is damaged as a result of this negligent act, the policy will defend you and pay compensation if you are legally liable subject to the specific terms and conditions of the policy. For example, your marquee at a fete comes loose in windy conditions as it was not properly secured; a person slips on a wet surface because you have not made it safe for people to walk on it.
The policy will also cover personal injury and/or property damage resulting from products sold or supplied. The potential exposure for a community group can arise from the manufacture, selling or reselling products. If a group is importing products, then it can be deemed to be the manufacturer. In all cases, there is a responsibility to ensure that the products are safe for the intended purpose. This responsibility attaches to all types of goods, including food and drink that may be supplied or sold as part of a group’s activities or events.
A Public and Products Liability policy will pay your defence costs and cover any amounts awarded as compensation to the injured person by a court of law subject to the policy coverage limits. Even if you are not found legally liable, and so no damages are awarded, there are still costs associated with such a claim which may be paid by the policy. In such circumstances, having a PPL policy has the potential to save your organisation a significant expense.
Are Events Covered Under Public & Produicts Liability Insurance?
It depends on the type of event you are holding and the number of people attending. Our Public & Products Liability Insurance is designed to cover the day to day running of the organisation and any committee meetings, fundraisers, sausage sizzles and events, you organise with up-to 500 people attending. The listed activities are deemed to be low risk and would be covered, subject to the terms and conditions of your policy wording.
However, If you are organising an event where you are expecting the attendance to be higher than 500, you would need to contact one of the LCIS Team to arrange additional insurance.
When it comes to large events – the more people attending the more risk there is so we would need additional information about the event including estimated attendance, where the event will be held, is the event ticketed, will there be security/first aid/fire personnel in attendance, if you have a risk management plan in place and would you need event cancellation insurance should the event be cancelled due to unforeseen weather etc.
Are My Contents Covered Under Public & Products Liability Insurance?
No. PPL Insurance covers your liabilities to members of the public if they suffer bodily injury or property damage. Your property is not insured, rather damage to third parties’ property is.
Are Our Volunteers Covered Under Public Liability Insurance?
Yes and No. If a volunteer working for you is injured because you did something wrong, and they make a claim against you in association with the injury, the PPL policy will likely respond to that claim by covering your defence costs and any damages or settlement that may be awarded if you are found legally liable, up to the limit of the cover.
If a volunteer in the course of their work for you does something wrong and a member of the public is injured and makes a claim against you, the PPL policy will likely respond to that claim by covering your and/or the volunteer’s defence costs. If a volunteer has a personal accident not caused by your wrongdoing and they are injured while working for you, their injury would likely not be covered under a Public Liability policy. If you have volunteers working for you, we would recommend you take a Volunteer Workers Personal Accident policy which will assist your volunteers if they are injured. Find out more about our Volunteer Workers Personal Accident policy.
Why Do I Need Products Liability Insurance?
Products Liability Insurance is there to protect you if a member of the public suffers bodily injury or property damage because of a product you sell.
The potential exposure for a community group can arise from the manufacture, selling or reselling products. If a group is importing products, then it can be deemed to be the manufacturer. In all cases, there is a responsibility to ensure that the products are safe for the intended purpose. This responsibility attaches to all types of goods, including food and drink that may be supplied or sold as part of a group’s activities or events.
For example, you organise a sausage sizzle to raise funds for the club, and those sausages are contaminated due to bad handling and people who have purchased those sausages from you suffer food poisoning. Products Liability would cover you for any costs associated with a claim made against you by a third party who suffered food poisoning.
Is A Jumping Castle That I Hire Covered Under Public Liability Insurance?
No. There is a policy exclusion to say no cover is provided. The person who owns the jumping castle would be responsible for inflating and deflating the device, including supervising it at all times when children are playing on the device.
The person who owns the jumping castle would need to have their own PPL Insurance.
Depending on the state in which your event is held and the size of the Jumping Castle, it may be deemed to be an amusement device and subject to State regulations. This can also apply to other inflatables. The Safe Work Australia website has guidance material which may help you manage the risks around the use of inflatable amusement devices.
Is Public/Products Liability The Only Insurance I Need?
There are other policies we highly recommend you consider. These are shown as below. Please contact the LCIS team for more information.
- Voluntary Workers Personal Accident Insurance;
- Associations Liability Insurance; and
- Property Insurance (also commonly called Business-Pack)
PPL Insurance is designed to cover your potential liabilities to third parties for personal injury or property damage. This policy can insure you against potentially costly claims that result from something you do or fail to do. We’re here to help with all of your insurance and risk management related enquiries. If there is any information on our website that you do not understand, and you require further clarification on, or you need risk management advice – please contact us as we want to hear from you!