Public Liability insurance protects you against the financial liability to pay compensation and legal defence costs that you may face from claims by members of the public who are injured. It also protects you against claims for any damage that you may cause to third party property. The most common cause of Public Liability claims are slips, trips and falls and damage caused to third party property.
Cover also extends to protect against claims for obstruction, trespass, nuisance or interference with any right of way, light, air or water.
Products liability insurance defends you against allegations that products you supply, install or repair have caused injury or property damage to others. Cover will also pay compensation that you are legally responsible for because of the injury or damage sustained.
Inefficacy is to do with the failure of goods or services supplied to perform the intended function. Examples would be a burglar alarm that doesn’t warn of an intruder or a thermostat on a machine that doesn’t correctly control temperature. All of these scenarios have the potential to result in injury or damage.
Public and products liability policies will often exclude or restrict this inefficacy risk, but cover is usually available, sometimes on specialist wordings.
It is important to understand if your business has an exposure to inefficacy risk and to check whether your policy includes cover.