Public Liability Insurance in Kenya

Public liability insurance pays compensation and legal costs if your business is legally liable for injury to, or the death of, a customer, visitor or other member of the public, or for damage to their property. Claims usually arise from slips, falls, falling objects or work done at a client's site. It does not cover your own employees, which is WIBA and employers' liability.

No Kenyan law we reviewed requires businesses in general to carry public liability insurance. In practice it is often a contract condition: landlords, shopping malls, event venues, lenders and tender buyers regularly ask for a certificate and a minimum limit before you can move in, trade or sign.

Public liability covers injury or property damage caused by your premises or activities. Products liability covers injury or damage caused by goods you make, import, sell or repair after they leave your hands. Professional indemnity covers financial loss caused by your advice, design or professional mistakes. A manufacturer may need the first two; a consultant mainly needs the third.

Start with any limit your landlord, mall, client or tender sets, then consider your worst realistic claim. Small shops and offices commonly carry about KES 5 million, restaurants, salons and clinics KES 5–10 million, and manufacturers or contractors KES 20 million or more. Check whether the limit is per occurrence or for the whole year, and whether legal costs are inside it.

WIBA pays the fixed compensation in the Act. Employers' liability (common-law) cover pays damages and legal costs when an employee sues you for negligence or breach of a safety duty. It is not required by law, but higher-risk employers often buy it. Some insurers sell it only alongside WIBA, typically at about 25%–40% of the WIBA premium.

Three covers are required by law for the businesses they apply to: WIBA for every employer, with no small-employer exemption; third-party motor cover for every vehicle on the road, including passengers for PSVs; and marine cargo cover with a Kenyan-licensed insurer for imports. Certain professions, such as doctors and advocates, must also hold professional indemnity. Fire and public liability are not required by general law, but landlords, lenders and tenders often insist on them.

Usually only if you arrange it. Food poisoning claims fall under products or 'food and drink' liability, which is an extension to public liability or a separate products liability policy. A basic public liability policy may not cover illness caused by food you serve or sell. Check the wording names food and drink, and that the limit suits the number of guests you serve.

Three statutory charges are added to the premium: a training levy of 0.2%, a Policyholders' Compensation Fund levy of 0.25% and stamp duty of KES 40. On a KES 50,000 premium, that adds about KES 265. Check that your quote shows them as separate lines so you can compare insurers on the same basis.

Make people and the premises safe, then limit further damage. Report theft, break-ins and accidents involving injury to the police immediately and get the OB number and an abstract. Notify your insurer or agent the same day (some insurers ask for notice within 24 hours). Photograph everything, keep damaged items for the loss adjuster, do not admit liability to anyone, and start listing what was lost with its value.

Expect to provide a completed proposal form, your KRA PIN, a certificate of registration or incorporation, a CR12 for limited companies, and the ID or passport of the person signing (some covers, such as bonds, ask for every director's ID). The insurer will also want a list of what you are insuring and its value, staff numbers and annual earnings for WIBA, your premises' construction and security, and three years' claims history.