Public liability is the legal responsibility for harm incurred by members of the general public as a result of negligence on the part of a company or government. People can file suit to collect damages to compensate them for injuries, and these damages may be quite large in some cases. Many large companies and governments carry public liability insurance to protect themselves in the event of claims, ensuring that funds will be available to cover damages if they are found liable in court.
A common form of public liability can be seen on business premises, where people who fail to maintain safe conditions can be liable if people slip, fall, or injure themselves in other ways while in the business. This type of legal liability also includes pollution caused by negligence, such as the accidental release of toxins into the environment. In any situation where it can be shown that a company or government acted negligently and damages were caused to people or property, there can be grounds for a legal suit.
Some public liability cases are very large and may be developed as class action lawsuits, where everyone impacted by something like pollution will join together in a single suit. Individual cases like slip and fall suits, suits against cities for damaging a car while towing it, and so forth are handled on their own. Courts at varying levels can hear public liability cases and make rulings.
Public liability insurance is available for a premium, with the cost of the policy varying, depending on the associated risks. The owner of a clothing store might have relatively low premiums because the chances of a high liability payout are low. A chemical manufacturer, on the other hand, could have very high premiums because releases of chemicals into the environment could result in substantial damages. The insurance company is usually involved whenever a suit is threatened to evaluate the merits, see if a settlement should be offered, and assist with defending the matter in court to reduce the amount it will be forced to pay.
In some regions and for some entities, public liability insurance is required, to avoid situations where people experience injuries as a result of corporate or government negligence and cannot recover damages as a result of bankruptcy declarations on the part of the defendant. In other cases, this insurance is simply strongly advised, as even a single suit could put a company out of business or substantially eat into a municipality's budget. Insurance agents can provide advice on selecting the best policy and getting the most out of public liability insurance.