Page 47 - Personal Underwriting Mandates & Guidelines - Binder - Version 3

Personal liability
PERSONAL LIABILITY
Personal liability insurance provides cover for legal liability in respect of damages to third parties caused by the insured.
"Damages" is a certain amount of money a court of law awards to a person who has suffered as a result of the unlawful action (or lack of action) of another person. This kind of unlawful action (or lack of action) is generally called ‘negligence’ in South African law. This is a failure to take care of the rights of other people.
Note: All personal liability claims must be reported to Hollard immediately, regardless of the quantum or whether it is a valid claim or not.
Damages could arise from:
○ the death or bodily injury or illness of third-party persons
○ loss of or damage to third-party property.
There are many events that could cause the insured to be liable to third parties
For a liability claim to be successful, the following must have happened:
○ the insured must be legally responsible for death, injury, loss or damage caused. This means that a South African court of law must find the insured responsible for the particular loss or damage. This would not apply, for example, where the insured offers to take a friend to lunch but forgets about the arrangement on the day. The friend cannot sue the insured for having to provide his own lunch because they only made a friendly agreement to eat together at the insured’s cost. If, however, the insured fails to secure a ladder and it falls onto a car parked next door, then this would be a clear case of negligence and he would be liable if the case went to court.
○ any loss or damage to third parties must be a result of negligence on the part of the insured. The liability cover on a non-life insurance policy will not cover events that were deliberately caused by the insured. For example, if the insured smashed the windows of his ex-wife’s house in a fit of rage, he would still be legally responsible for this deliberate act but the policy would not provide cover.
○ there must be physical loss or damage to persons or to tangible property of third parties caused by the insured or his employees. "Tangible" means property that can be seen, touched and measured. There would be no cover under the policy for events causing third parties to become merely angry or upset.
○ the loss or damage caused must be quantifiable and have a financial (Rand) value attached to it. This Rand value could be in the form of medical costs, repair costs to property or loss of income of third parties.
○ loss or damage must be caused to third-party persons or property. Under these sections the following are not considered third parties:
– members of the insured’s family
– the insured’s own property.
Included cover under personal liability
Liability cover related to the use and ownership of motor vehicles is excluded under personal liability, as cover is more specifically provided under the motor vehicle sections of the wordings. The intention of the liability cover under Motor, to provide cover for vehicles insured under the motor section.
46 Personal Underwriting Mandates & Guidelines – Binder – Version 3