Enter LIABILITY COVER - provided in terms of the liability sections, which sections of the policy what does this mean/imply or cover? What is covered? How is it Covered?
First things first – the sections or covers we are talking about are – Public Liability, Employers Liability, Personal Liability, Motor Third Party Liability, Contractors Liability as the major groups.
Secondly – The cover protects you against your Legal Responsibility to compensate somebody else for their loss.
Thirdly – The cover is sold on an indemnity basis, in other words, the insured purchases an amount that they want to insure and this amount may or may not be sufficient to compensate for someone else’s loss.
It is important to note that the extent of the insured’s responsibility to the other person needs to be determined by a court, since the insured’s LEGAL LIABILITY is the risk that was transferred. The other party thus needs to institute legal proceedings against the insured and prove their loss, in addition to that the court will decide a fair amount to compensate the aggrieved party. This process, as we all know, may take years to conclude and may even be rejected by the court. The legal expenses to defend the insured in court could be a crippling amount of money despite the defendant being proven not guilty!
Policies have evolved over time to address these very real problems for businesses and individuals. The legal costs to defend the insured forms part of the eventual payment or settlement if any and thus the insured do not have to worry about financing the cash requirements of defending the action against him or her.
Now to answer our question above.
The insurer will investigate the circumstances of the loss “claimed” from our insured, discuss this with our legal team and decide whether the “claim” should be defended or settled. It is therefore important to understand that Quanta will defend the insured’s good name and actions.
It is like having a well trained and seasoned boxer in your corner; a good blend of defence and purposeful attack when needed.