It covers your legal liability arising from accidents or other incidents which might occur at meetings, events, guided tours, safaris, transportation or simply on your premises where you have been deemed to have been negligent.

Negligence is simply doing something without a reasonable amount of care, or failing to have done something that might reasonably have been done to prevent the incident from having occurred in the first place.

Most liability insurance policies only cover actions brought against the insured entity, unless the policy specifically extends to include ‘all sub-contrators’. This is an important aspect, specifically from a Tour Operators’ perspective, a they often sub-contract the services of Tourist Guides for instance. Unless the policy wording contains this extension, the Tourist Guides would need to have their own liability cover, which should be checked by the Tour Operator, for the reason that any actions instigated as a result of the Guide’s negligence could result in the Tour Operator being found liable by virtue of contractual obligation. The same applies to Tour Brokers who sub-contract the services of Tour Operators.

Here one must also consider that even if the action against the organisation is successfully defended in a court of law, the legal fees incurred over the often lengthy process of defending the case can often exceed the amount of the initial action. Again, most liability policies will cover the legal costs incurred in defending the case, but make sure that this cover is not limited.

General Public Liability cover is designed specifically to protect the insured against any possible financial compensation claims by clients, guests or the general public where corporate or employee negligence could be construed to have been the cause of an incident occurring.

This covers a very broad spectrum of possible incidents ranging from damage to a guest’s personal property to a tourist claiming ‘diminished value of holiday’ due to their expectation of having a sea-facing room (as shown in the tour brochure) and ending up with a view of a brick wall. Obviously the likelihood of such events occurring is quite high but not nearly as high as someone sustaining an injury in a motorcar accident.

For this reason most GPL policies specifically exclude incidents resulting from the transportation of passengers by land, sea or air. This is covered under a Passenger Liability policy and can often be included as part of a Motor insurance policy. However care must be taken to check that the motor policy wording does not exclude fare-paying passengers, which is often the case. It is unlikely that an underwriter will be prepared to cancel or amend the wording of a standard motor vehicle policy. For this reason Daily Cover policies are specifically for to cater for fare-paying passenger liability.

So how much is ‘sufficient’? Both GPL and PLI cover depend on the ‘net worth’ profile of your clients. For example, consider a 40-something, married South African business executive who earns R500 000 a year, is the sole bread winner and has three dependents. He or she slips in the shower at your lodge and sustains a disabling injury to the spine and is unable to perform the same job as done before the incident. After a lengthy (and costly) legal case the court finds that you were negligent for not ensuring that the shower was fitted with non-slip tiles or mats. A possible award to the plaintiff could easily be in the region of R10 million in this example, if one takes into account the costs of on-going medical costs, loss of income and even alterations to the family home to make it wheel-chair friendly.

Now consider the event of multiple claimants, or foreign guests whose income and future medical costs need to be calculated in their currency of origin. Quite obviously, the cover amount needed corresponds to the profile of guests that your establishment caters for.

In the case of PLI, SATSA recommends a minimum of R5 million cover but this depends on the number of passengers that you generally transport at any one time. Some policies recommend R1 million per seat but this does not make sense as it is more likely that one passenger in an accident will be more seriously injured than others and R1 million will not be enough to cover that one person in a particular seat. Far better to ensure that the cover amount is for all occupants of a particular vehicle per incident, per occurrence regardless of the number of passengers, which the Daily Cover policy does.

Of course, the number of passengers does make a difference in calculating the cover amount required. For instance, R10 million may be sufficient for a micro bus but a coach may need as much as R100 million cover, which is not easily obtained from most insurance brokers.