Author Bowtie Team
Updated on 2025-06-03
Disclaimer: This article is translated with the assistance of AI.
The recent MIRROR concert accident, where a massive screen fell and injured dancers, has sparked widespread concern. Now, insurers are reluctant to cover public liability for events, delaying future shows. What exactly is Public Liability or Third-Party Insurance, and do you have the need for it? The Bowtie team breaks it down with real examples to help you decide.
What is Public Liability Insurance?
“Public Liability Insurance” is a type of commercial insurance that protects the insured against legal compensation responsibilities for damages caused to the public interest when conducting business operations, production, or daily activities in public places.
Public liability insurance is divided into different plans based on various business situations. Small event public liability insurance or general event public liability insurance is one type of it, specifically designed for non-governmental organizations, schools, charitable institutions, and businesses, covering legal liabilities for third-party death, illness, injury, or property loss during small or regular events.
There is also public liability insurance for large events.
Is There a Difference Between Public Liability Insurance and Third Party Insurance?
Public liability insurance, is often referred to as “Third Party Insurance”. They mean the same thing.
Who Needs Public Liability Insurance?
If the policyholder operates an office or shop and has already purchased comprehensive office insurance or shop insurance, it typically includes public liability insurance.
Those who usually need to purchase public liability insurance independently include factory owners, building management companies, property owners or owners’ corporations, and restaurants. Additionally, policyholders can also buy this liability insurance for specific events or projects, such as concerts, promotional events, or sports competitions.
Examples of Public Liability Insurance
As long as commercial activities could potentially cause loss to third parties in public places, public liability insurance is needed. Let’s take a look at the following examples:
Example 1: A building management company causes injury or death due to negligence in management
Company A is a building management company that needs to purchase mandatory “Building Public Liability Insurance.” If negligence in building management leads to third-party injury or death, the company can claim compensation from the insurer for payments made to the third party and related legal fees.
Example 2: A tenant in a commercial building causes third-party injury or property loss due to renovations
Company B is a tenant in a commercial building managed by Company A. Since it has purchased “comprehensive office insurance” to cover liability risks from third parties entering the office, Company B doesn’t need additional public liability insurance for office operations.
Recently, the office requires renovation work. During the renovation period, Company B needs to purchase, as required by management, Engineering Public Liability Insurance to cover legal liabilities for third-party injuries or property losses caused by the contractor’s accidents or negligence.
(Policyholders should note that hiring a contracting company versus an individual contractor makes a difference in insurance coverage; some insurers only cover contracting companies, so check with your insurance broker.)
Example 3: An exhibitor causes third-party injury or property loss due to negligence at an exhibition
Company B operates an exhibition services business and has recently been hired by Company C to organize an exhibition. In line with the venue’s requirements, Company B needs to purchase “Exhibition Public Liability Insurance” for Company C’s event to cover liabilities for third-party injuries or property losses caused by the exhibitor’s negligence.
Public Liability Insurance Coverage and Exclusions
The claims coverage of public liability insurance mainly includes the following:
Coverage
✔️ The insured’s legal responsibility to compensate third parties for bodily injury (including death) or property damage and loss
✔️ Any legal costs and expenses claimed by claimants against the insured, as well as any reasonable costs agreed in advance by the insurer
Exclusions
❌ Liability arising from the intentional acts of the policyholder or their representatives
❌ Liability caused by pollution
❌ Fines, penalties, or punitive damages
❌ Damage to property owned, possessed, or managed by the policyholder, their family members, or their representatives
❌ Any compensation arising from contractual obligations
❌ Legal liability resulting from the policyholder breaching duties within their professional field
❌ Liability arising from nuclear weapons, nuclear materials, nuclear radiation, or radioactive contamination; or from war, invasion, acts of foreign enemies, hostilities, acts similar to war, or civil war
FAQs about Public Liability Insurance
1. What factors affect the premium for public liability insurance?
The premium for public liability insurance is typically calculated based on the insured’s industry and service scope, as well as the sum insured. Other factors, such as business size, turnover, and potential risks, can also influence the premium.
Plus, the maximum compensation under public liability insurance is limited to the sum insured stated in the policy.
2. How to apply for insurance? What information is needed for quoting?
Many insurance companies and banks offer public liability insurance, so you can start by choosing which one to go with. Then, follow these simple steps to apply:
- Request an application form from the insurance company or bank
- Complete and submit the application form to apply
- Once you receive the quote, make the payment, and you’re all set
For quoting, you’ll need to provide the following information:
- Name of the insured entity
- Address of the insured unit or activity venue
- Nature of the business
- Maximum limit of liability coverage
- Have there been any losses or claims in the past 3 years?
- Is there an existing policy in effect?
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