Insurance

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What Is Insurance?

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Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium.

Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

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What Is Liability Insurance?

Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a home owner’s insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others’ lives, health, or property.

The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of willful or intentional acts by the insured.

Why Have Public Liability Insurance?

Public liability is part of the law of tort which focuses on civil wrongs. An applicant (the injured party) usually sues the respondent (the owner or occupier) under common law based on negligence and/or damages. Claims are usually successful when it can be shown that the owner/occupier was responsible for an injury, therefore they breached their duty of care.

The duty of care is very complex, but in basic terms it is the standard by which one would expect to be treated whilst one is in the care of another.

Once a breach of duty of care has been established, an action brought in a common law court would most likely be successful. Based on the injuries and the losses of the applicant the court would award a financial compensation package.

What Are The Most Common Public Liability Claims?

The most common types of claims fall into a small number of categories:

1. slips, trips and falls—these make up the majority of claims;
2. stress and anxiety, due to hold ups, elevator malfunction, etc.;
3. falling objects, i.e. striking against or struck by

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