Public liability insurance is a common insurance policy that organisations or individuals take out to protect against any liability they may face from a third party regarding any business-related activity.
Essentially, it protects businesses/business owners from third parties who have suffered damage to their person or property and as a result are seeking compensation from another party. This type of claim brought against another party would typically be a negligence claim.
Sarah suffers food poisoning from a meal she ate at a cafe and decided she wants compensation from the cafe. If she wishes to get compensation from the cafe Sarah must prove that the injury was their fault. So, essentially Sarah must prove that her food poisoning was contracted from the meal served by the cafe and from no other source.
If the cafe is found to be negligent of serving dangerous food the cafe might be ordered to pay Sarah compensation. Compensation can often be a large amount of money, and will be scaled to meet the level of the injury inflicted upon the third party. However, if the cafe has liability insurance they won’t have to pay the compensation themselves and their insurance company will, potentially saving the cafe thousands of dollars.
The cost of public liability insurance has been raised, affecting many business owners and organisations. These rises in price have forced the cancellation on community events as the liability costs have increased beyond reasonable cost.
In response to this State and Territory governments around Australia have changes the laws surrounding claims for negligence. The changes employed by the Australian government have made it more difficult for a person to sue for negligence by making alterations to how compensation is calculated and in some cases changing the payment scheme from a lump sum payment to instalments.