When we talk about liability, we mean legal liability or liability at court of law. It is not social or moral liability.
living in a society it is important to know about our rights as well as our liability.
Whether in a domestic circle or in a corporate world liability may develop due to various personal or business activities.
There are various types of liability insurance which may be described as below:
1. Personal Liability, 2. Public Liability, 3. Employer’s Liability,
4. Product Liability, 5. Professional Liability etc.
We shall now discuss the above insurances in some details.
Personal liability may develop on an individual arising from various reasons.
1. A pet dog biting a stranger, 2. Damage to neighbour’s property caused by the activities of a domestic servant, 3. A minor (under the age of 18) damaging third party property (say breaking a window pane) while playing cricket in an empty space adjacent to the building, 4. Domestic cattle damaging crop in a nearby field, 5. Stepping on a banana skin (thrown carelessly on a street) and pedestrian sustaining bodily injury, 6. Throwing cigarette butts carelessly without extinguishing it properly may cause fire (driven by high wind) damaging nearby third party property etc.
Third Party Liability or Public Liability may develop on owners/operators/ managers of business premises namely offices, shopping malls, recreational facilities etc. arising from various business activities.
1. Falling or tripping over by a customer on a slippery/wet floor in a shopping mall causing bodily injury, 2. Tenants/guests getting stuck in an elevator/lift causing suffocation and/or trauma due to electrical or mechanical failure, 3. A delivery van hitting a boundary wall/gate causing damage to third party property, 4. Damage to a customer vehicle under repair in a garage caused by fire due to the negligence of garage owner, 5. Tripping over an uneven floor of a restaurant by a customer causing bodily injury etc.
Employer’s liability insurance has been made compulsory by law in many countries..
Employer’s are generally responsible for the health and safety of employees while at work.
Employer’s liability may arise due to various reasons.
1. An employee falling from a defective ladder sustaining bodily injury or death,
2. An employee electrocuted due to faulty electrical wiring, 3. An employee sustaining injury at a construction site because safety gear namely helmet, boot not provided by the contractor, 4. An employee sustaining bodily injury while working on a defective machine, 5. An employee damaging eye while working in a welding factory due to factory owner not providing protective goggles or eye shield, 6. An employee damaging ear while working in a nail factory due to factory owner not providing ear plug, 7. Employees suffering from general health problems because of inadequate or poor ventilation facilities in the workplace etc.
Product liability may develop on the manufacturers of goods as well as on the suppliers.
1. A patient may develop health problems due to consumption of defective drugs or medicine, 2. A customer may fall sick by eating stale/rancid food in a restaurant, 3. A customer may fall sick by consuming adulterated food supplied by a vendor, 4. An aircraft may develop engine trouble in mid air and crash killing all passengers on board due to defective or faulty engines etc.
Professional liability may develop on various professionals namely doctors/physicians, architect engineers, lawyers/solicitors etc. arising from their professional negligence, errors or omissions.
1. Death or deterioration of health of a patient due to wrong diagnosis or treatment by a physician , 2. Death of a patient due to dispensation of wrong prescription by a physician, 3. Client suffering financial losses due to wrong advice given by a lawyer/solicitor, 4. A building developing cracks or collapsing due to faulty design by an architect etc.
In all these cases the victims are owed financial compensation by the guilty parties.
Liability may prove very onerous at times. Courts especially in the West are generally sympathetic to the cause of the victims and have a propensity to award huge sums of money while delivering their verdict in recent times.
Some of the above insurances may be made mandatory by law enabling third parties to receive compensation from the defaulting parties or resorting to legal action to protect their rights and interests.
Mr. Haque was brought up and educated in Dhaka. He obtained his master’s degree with honours in Biochemistry from University of Dhaka (DU). He spent nearly four decades in Dubai (UAE) working for several multinational insurance companies in various capacities. He obtained his Fellowship (FCII) from The Chartered Insurance Institute (CII), London, Associateship (AIRM) from The Institute of Risk Management (IRM), London, Associateship (ACIArb) from The Chartered Institute of Arbitrators (CIArb), London. He has authored several books on insurance which have been acclaimed both at home and abroad. He contributes regularly on insurance matters in various online insurance news portals and is a founder General Secretary of Bangladesh Insurance Professionals Society (BIPS).