When your premises fail: the liability you carry for the people on them

It is the risk a business almost never pictures. Not that something happens to your building, but that something happens to a person inside it, and that the person, or their family, looks to you.

On the afternoon of 6 September, a five-storey building housing students in south Delhi collapsed, killing several people and trapping dozens more as rescue teams worked through the rubble. The cause will be established in time, and it is not the point of this piece. What the moment makes unavoidable, for anyone who runs a premises, is a question most owners never sit with: if the people on your premises are harmed, what do you owe them, and is any of it insured?

This is not only a story about hostels or landlords. Any business that lets people through its doors — a shop, a restaurant, a clinic, an office, a workshop, an event — carries a responsibility for the safety of those people while they are there. And insuring the building is a different thing entirely from protecting yourself against what you owe the people in it.

Put simply: commercial general liability, often called public liability, is cover for third-party claims of bodily injury or property damage arising from your business premises or operations — meaning the people who are not your employees but are harmed because of your business. It is what answers when a customer, visitor, guest or passer-by is hurt and looks to you.

Insuring the building is not the same as covering the people

This is the distinction that decides whether an owner is protected or exposed. A property or fire policy answers for your own assets, the structure, the plant, the stock. It is not designed to pay a claim brought by a person who was injured on your premises. Those claims, for the harm done to a third party, sit under liability cover, and they can dwarf the cost of the building itself. A business that has diligently insured its property and never arranged liability cover has protected the thing that can be rebuilt and left uncovered the thing that cannot.

What public liability actually covers

In broad terms, commercial general liability responds when your business is held responsible for bodily injury or property damage suffered by someone outside it, whether that happens on your premises or arises from your operations. It typically helps with the legal defence and the compensation a business becomes liable to pay, subject to the policy’s limits, conditions and exclusions. The scope, the limit, and what is carved out are where policies differ, which is exactly why the wording is worth reading before it is ever needed.

It’s not only landlords and hostels

The reason this matters widely is that almost every business invites people onto its premises. A customer slips in a store, a visitor is hurt by falling stock in a warehouse, a guest is injured at an event, a patient is harmed in a waiting area. None of these are your employees, and none of them are covered by the policy on your building or the benefits you give your staff. If people come through your doors, this is your exposure, whatever your sector.

And your own people are a different cover again

It is worth being clear about the boundary, because it is easy to blur. Public liability is about people who are not your employees. Your own staff sit under different covers entirely: workmen’s compensation for the employer’s legal liability when a worker is hurt at work, and group personal accident as a benefit to the worker or their family. A serious incident on a premises can trigger all of these at once, which is precisely why they are worth mapping before an event, not during one.

How harm on your premises maps to cover

It helps to separate the event into the distinct losses it causes, because each is answered by a different cover. This is category-level — it describes how cover generally works, not any one insurer’s product.

A five-minute check before you need it

You don’t need a full review to find the biggest gaps. Five questions usually surface them:

1. If someone were hurt on your premises tomorrow, is the claim covered?Check whether you hold public or commercial general liability at all, separately from your property cover. Many businesses assume they do and do not.
2. Do you know the difference between insuring the building and covering injury?They are two different policies doing two different jobs. Holding one does not give you the other.
3. Does the liability limit match your footfall?A premises that hundreds of people pass through carries more exposure than one that a handful do. The limit should reflect reality, not habit.
4. Are your own staff covered separately?Workmen’s compensation and personal accident cover your people; they are not a substitute for public liability, and public liability is not a substitute for them.
5. If a serious claim landed, who assembles and argues it?Liability claims can be large and contested. Knowing in advance whether that is your job or someone else’s is the quiet difference on a bad day.

A note on this page. Everything here is general information, not insurance, legal, financial or tax advice, and nothing is an offer. Cover, including what a liability policy responds to and for how much, depends on your own policy wording. The statutory reference, the Public Liability Insurance Act, 1991, is the current position and should be confirmed with counsel. For advice about your situation, talk to us. The Delhi incident details were drawn from reporting dated 6 September 2026.