Key takeaways
- Bodily injury liability is the legal responsibility for physical harm, illness, or death of another person
- Property damage liability is the legal responsibility for the destruction of or harm to someone else’s physical property
- There are numerous liability insurance covers available to safeguard against compensation claims for bodily injury and property damage
In the context of insurance and legal liability, bodily injury and property damage are terms that are frequently used. Both are associated with legal claims and can be covered under various forms of liability insurance, such as public liability, product liability, and employers’ liability. Whilst less commonly under professional indemnity and cyber liability.
What is bodily injury?
Bodily injury examples:
• A customer trips over a loose cable and breaks their arm
• A contractor accidentally injures a pedestrian whilst on a building site
• A faulty product causes burns and an allergic reaction
Damages awarded for liability liability can also include compensation for the physical pain, suffering, and loss of amenity. Claims involving severe injuries, such as broken bones, head injuries, or long-term disabilities, can result in high compensation payouts.
What is property damage?
Property damage examples:
• A fire spreads to a neighbouring business property
• A builder accidentally floods a client’s kitchen
• A faulty product causes damage to a client's machinary
How liability insurance covers bodily injury and property damage?
1. Public liability insurance
It does not cover injury to your employees or damage to your own property, but will provide your business with protection for the actions of your employees. It is commonly accepted it is an important protection for any business that interacts with members of the public (including bona-fide subcontractors).
2. Employers’ liability insurance
Common claims under employers’ liability insurance include slips, trips, and falls in the workplace, injuries caused by faulty machinery, repetitive strain injuries, or illnesses linked to hazardous substances.
3. Product liability insurance
Even if your business is not directly responsible for a product fault, such as when importing goods from overseas or selling under your own brand, you may still be held legally liable under UK consumer protection laws. This cover is especially important for retailers, wholesalers, manufacturers, and ecommerce businesses.
4. Professional indemnity insurance
This is particularly relevant in industries like architecture, engineering, and surveying, where design, advice or specifications can lead to consequential losses that include bodily injury or property damage. For example, an engineer’s incorrect calculations may lead to structural failure, injuring individuals and damaging property.
5. Cyber liability insurance
Where software controls critical systems, such as machinery or infrastructure, the potential fallout from a cyberattack can result in physical consequences. For example, a manufacturer’s network could cause robotic equipment to malfunction, which then causes employees bodily injury or damage to customer's property.
6. Directors & officers liability Insurance
While D&O insurance will typically exclude bodily injury or property damage, cover can be carved back for a where the board is alleged to have failed in their supervisory responsibilities, which contributes to the incidents that causes the bodily injury or property loss. Please note that D&O insurance is not a substitute for public, product, or employers’ liability cover, but complements a business’s overall risk management strategy.
7. Commercial combined insurance
Commercial combined is a solution works for SMEs such as wholesalers, manufacturers, warehouses, and retailers and helps ensure both bodily injury and property damage liabilities are addressed under a single policy.
About the author
Simon Taylor is a respected senior industry professional and a Chartered Insurance Broker with over 20 years’ of experience in the commercial insurance sector as an underwriter, broker and director.