Personal Liability Insurance
Personal liability…what does it really mean? We are actually talking about serious stuff here, and yet, many of us never give it much thought. When you look at the definition of legal personal liability it refers to the duty (or obligation) of an individual to meet monetary claims for damage or loss caused by the actions of the individual. The definition clearly states that claims can be made against your personal assets to meet personal liability claims.

Let’s explain in more detail what personal liability is
Personal liability is a legal responsibility you have towards others and it is a principle of common law. Common Law forms part of the South African legal system and this principle is therefore applicable to all of us as citizens of the country. Personal liability claims will be as a result of your negligence or can even be for not taking preventative steps to protect others against injury, death or loss.

Let us look at an example of personal liability: If your dog bites and injures someone driving past your house on a bicycle, the injured person can lay a personal liability charge against you for his or her injuries, trauma, and any other costs that result from the incident.

Taking out insurance against personal liability claims
Personal liability claims against you can cripple you financially yet we never seem to think of the possibility of something like this happening. Luckily you can take out insurance cover against personal liability claims.

How does it work?
This insurance will only pay out if you are found guilty in a court of law. Also, if your insurance company’s legal advisors feel that it is a very obvious case in which you will be found guilty they will settle the claim without the additional costs of taking the issue to court. Personal liability cover will also include your legal costs if you are sued.

If you have car insurance and or house holder’s or content insurance go and check your policy document and see if your policy include personal liability cover.

What about gross negligence?
If you commit an act you know will result in damage and/or injury to another party you could, and probably will, be found guilty of gross negligence. In this case your insurance company has no obligation to pay out against personal liability.

Personal Liability specific to car insurance
Prior to the 1st of August 2008 personal liability cover was an important part of car insurance. Policies often included personal liability cover of one million to three million rand at no extra cost. You can also take out additional cover for a small monthly premium covering you for up to ten million. This cover was for any personal liability claims not covered by the Road Accident Fund.

What happened to change personal liability in car insurance?
In August 2008 amendments to the Road Accident Fund came into effect and brought about huge changes to the system and rules relating to the Fund. The most substantial and far-reaching result of the amendments is that a victim can no longer claim any damages from the driver who caused the accident. Victims can only claim against the Road Accident Fund and the amounts are subject to various limits.

What are the consequences of this change?
As a driver the result of the change in legislation is that you no longer need to take out personal liability cover of millions of rand as you cannot be sued for personal liability as the guilty party. The only claim still allowed will be for emotional shock suffered by secondary victims of the accident.

On the other hand you need to look at your own position - if you are the victim you can only claim a limited amount from the RAF. As a result of this change it is imperative for you to ensure that you have sufficient personal accident and income protection insurance in case of a serious accident. The amendments of the act therefore forces one to take on more responsibility for yourself to protect your future lifestyle.

One’s Common Law Rights
As this ruling limits a victim’s common law right to sue for full compensation of loss or damage suffered we are bound to see this law being tested in the courts eventually. Now it’s still early days. As the saying goes…watch this space.