Personal Legal Responsibility/Liability & Third-Party Liability
Here is your complete guide to what Personal Legal Responsibility/Liability and Third-Party Liability covers. We will be discussing the difference between the two.
Although Personal Legal Responsibility/Liability is the overall term given to your policy, it could also split into the following sections. Understanding the distinctive qualities of each coverage is necessary. There are two different subsections, which cover different scenarios.
- PL – Personal Legal Responsibility/Liability
- TP – Third-Party Liability
Although each share similarities, they also have distinct differences. For the insured to claim under their Personal Legal Responsibility/Liability policy, you need to prove gross negligence against the insured.
Personal Legal Responsibility/Liability (PL)
A Personal Legal Responsibility/Liability policy essentially provides cover against a party suing you, in an individual capacity, for financial loss, physical injury, or death.
Everyone knows that accidents do happen, but unfortunately, someone is always in the wrong. In the case of being blamed, you will become liable for damages caused to the third party. Costs could include;
- Medical Bills
- Legal fees
- Restoring or replacing damaged property
- Loss of income
Think about it this way; You are busy with renovations at your home. One of the contractors is badly bitten on his hand by one of your dogs. The contractor holds you as the insured, liable for the following:
- Medical cost
- Loss of income
Your Personal Legal Responsibility/Liability policy will cover these expenses.
Third-Party Liability (TP)
Third-Party liability links to your Motor policy for a sum insured of R2.5 million. There is an option to buy up to R5 million, which is the limit that the policy will payout in the unforeseen event of a loss in which you are found legally liable.
Although the Road Accident Fund (RAF) is the route people must take if they have been injured in a road accident and want to claim for third-party compensation, the fund may have specific limitations.
An example: The insured is driving down the road and approaches a red light for the insured to stop. The insured fails to stop in time and proceeds to run over a pedestrian crossing the street. The Third Party (Pedestrian) suffers multiple injuries as a result of the accident and now holds the insured liable for the following:
- Medical Cost
- Loss of income
- Legal fees
Your third-party liability policy may cover these expenses.
Always remember to read your policy documentation, and if you have any further questions regarding your PLTP, do not hesitate to contact your broker/financial advisor.
