This is an area that causes some difficulty for clients and this may be partly due to how the insurances are handled in the United Kingdom but what is the difference between public liability and product liability insurance?
Both policies provide third party liability insurance protection to the policyholder, that is to say that they protect the policyholder against claims made against them by third parties in respect of the policyholder’s legal liability for personal injury or property damage. Any confusion that may exist between the two classes of insurance is also perhaps exacerbated by the fact that product liability is usually offered as an extension to a public liability policy or as an extension to the public liability section of a combined or package insurance policy.
In spite of this the two classes of insurance are actually quite distinct are intended to protect policyholders against almost entirely different risks. For different businesses and occupations the degree to whether you are more likely to be effected by a product liability claim or a public liability claim will depend upon the nature of your business and for many businesses the contrast between the two should be apparent in the following overviews of the covers.
What does a public liability policy cover?
The public liability policy protects the policyholder in respect of claims made against them in respect of their legal liability for personal injury or property damage arising out of and in the course of their occupation. For a more complete overview visit our main public liability insurance page.
What does the product liability policy cover?
The product liability policy protects the policyholder against claims made against them in respect of products sold or supplied by them. This protects the policyholder against actions arising from both civil law and importantly against the strict liabilities that are created under the Consumer Protection Act 1987. For a more detailed overview visit our main product liability insurance page.
What are the limits of indemnity under public and product liability insurance policies?
The limit of indemnity is the maximum amount of the insurance company’s liability in respect of claims under the policy. Again this area demonstrated the difference between the two covers; public liability policies have a limit in respect of each and very claim and product liability policy limits are based on any one claim and in the aggregate. These two basis of limits of indemnity and the way that they are applied can be examined more fully on our “any one occurrence or in the aggregate” page.
As previously stated product liability is not generally available as a stand-alone policy and must be purchased alongside public liability insurance. This can be arranged under a public liability policy or as part of a broader range of business insurance covers such as a package or combined policy. You can apply on-line or call us directly to discuss your requirements and we shall be more than happy to assist or answer any further questions you may have on the difference between public and product liability insurance.