An Introduction to Malaysia Public Liability Insurance.

Malaysia Public Liability Insurance is extremely important for a business to have, regardless of whether it’s a retail business, or an administration office. For example, when a SME Owners open the doors to the public, potential liability for a slip and fall accidents opens.

Conditions such as worn our carpeting, poor lighting, narrow winded stairs or a wet floor can cause someone to slip and hurt him or herself whilst in your premises. For a third party to put the blame on you, it must be proven that negligence is caused on the business owner.  

Another example of negligence caused by the business owner can also take place in a hardware store. If a can of paint were to fall on to the ground, and causes a customer to slip and suffer an injury, the customer has the right to sue the hardware store under the basis of damage due to negligence.

This is why it’s good to know that there are many types of public liability claims made against business just as there are many types of public liability policies.

WHAT IS MALAYSIA PUBLIC LIABILITY INSURANCE?

Malaysia Public Liability Insurance extends to covering the legal action cost and compensation claims if the case is lost while made against your business. This happens when and if a third-party is injured due to negligence that’s happened in your business premises.

Malaysia Public Liability policy can be bought in 3 types of businesses.

(a) Premises/Office Risk:

Commonly purchased by business owners, this policy covers third-party bodily injury or third-party property arising out of business operation such as offices, restaurants, trade office, etc.

(b) Contract Risks:

When a contractor is awarded a contract, it is written in the clauses of the contract that the Public Liability must be purchased by the contractor for a certain amount, be it as a separate policy or add on in Section 2 of the Contractor All Risk Policy. Majority of the time, the contractor All Risk Policy would absorb the cost of insurance premium of Section 2 of the Public Liability Policies.

However, certain cases such as mall renovation for a certain outlet requires two different insurance policies to start the project. In this instance, the cost of renovation of an outlet is RM40,000.00 while Public Liability coverage required by the mall operator would usually be at least a Million Ringgit.

(C) Premises and Operations including Work Away Risk

This type of public insurance is applicable to air-conditioning maintenance companies or companies in the similar line of works. It is important that the policyholder inform the insurance company of any new locations added to the Policy for it to be an effective coverage. For example, if an air-conditioning maintenance has been done at a client location, then the maintenance company is liable in the event of any bodily injury or property damage incurs due to the defect in the Air Cond maintenance program.

Who Needs Public Liability Insurance?

Public Liability Insurance is extremely important for the above businesses simply due to the high level of exposure to the public.  

For example;

(a) Beauty saloons. If hair straighteners that were left switched on have incidentally burnt your customers, and thus causing bodily injury, you are technically liable as negligence falls on you.

(b) F&B such as Restaurant and Cafes. These trades have a high level of exposure to public. Public Liability Insurance covers you in case of being sued due to bodily injury or third party property damage.

How can Public Liability be purchased?

(a) Premises/Office Risk

The company would need to fill up an application and/or proposal form based on the nature of business, in order for the insurance company to proceed with the insurance coverage.

(b) Contract Risks

The contractor would need to present the letter of award from the principal company that states the requirements of the public liability sum insured of the project.

An insurance cover note would then be issued accordingly for presentation to the principal company for the immediate start of contract works.

(C) Premises and Operations including Work Away Risk

Apart from presenting a complete proposal form, the insured would also need to present the company profile, technical profile and etc., of the works done in order to get a good rate from the insurance company.

Examples of a Malaysia Public Liability claim:

Often, clients will be confused by what are scenarios that a claim will trigger Public Liability Coverage? Examples are such but not limited to the scenarios stated below:

  • You leave a box lying on the floor in your shop and a customer trips over, thus causing an injury;
  • Your employee spills a drink in a café and a customer slips over this, thus causing an injury;
  • A customer falls down a flight of stairs in your factory because the handrail is broken, thus causing an injury;
  • Whilst carrying out some carpentry repairs at a client’s office, you leave a plane on the floor that causes an employee to trip over, thus causing an injury that leads to a damage claim against you;
  • If a tile drops of a roof that your company is repairing drops, and causes a death to a passer-by because sufficient care had not been taken by your employees to secure them; or,
  • You knock over a valuable antique when carrying in a carpet you are fitting at a customer’s home.

Claim Process for Malaysia Public Liability Insurance:

Generally, the claim process for public Liability insurance is like other insurance claims process. You would need:-

  • Completed Claim Form
  • Police Report where appropriate
  • Incident Report

Additionally, Malaysia Public Liability cases are often comprised of court cases since bodily injury claims are involved. It is of utmost importance that once a third-party makes a claim either for bodily injury or through a lawyer, the client would need to inform the insurance company immediately. By doing so, the insurance company would appoint a lawyer to represent them.