The importance of comprehensive public liability cover has again been highlighted following the recent cases of armed robbery at Canal Walk Shopping Centre in Cape Town which resulted in the theft of an estimated ZAR1m worth of Apple products last week as well as ZAR2m worth of diamonds, rings and watches on Saturday - despite security and surveillance. This latest incident, together with a spate of recent Gauteng shopping mall robberies proves that 2014 will follow typical trends with an uptick in mall robberies towards the festive season.

This is according to Simon Colman, Underwriting Executive at SHA Specialist Underwriters – the largest liability underwriting management agency (UMA) in Southern Africa – who says that property owners often underestimate the value of public liability cover with many businesses buying less than ZAR5 000 000 worth of cover. “With crime becoming an increasing problem across the country, paired with an increasingly litigious population, it is imperative for shopkeepers and property owners to review and revise the limit of their liability cover to ensure it is as wide as possible.”

Public liability policies cover the defence costs (legal fees) to defend the insured if it is alleged that they are liable for any injuries or damages sustained by customers during a robbery, explains Colman. “If the defence is unsuccessful, the damages awarded by the court are covered, though some liability insurers will settle if the prospects of successful defence are poor.”

In the case of robberies, South African law still requires there to be negligence on the part of the property owner or shopkeeper in order to hold them liable for any injury to consumers, explains Colman. “A robbery does not automatically impute liability onto the property owner/shopkeeper. Some unknown party is actually responsible for perpetrating the crime itself and would of course be criminally and civilly liable for the injuries and damages.”

He says the question that retailers need to ask is if they have done all that they could reasonably be expected to do in order to keep their customers safe. “If they have been negligent in carrying out their duty of care to customers, it is possible that liability could attach. For example, if a security system prevents the exit of customers when a robbery is in progress, one could argue that this puts customers in harm’s way.”

From a shopping mall tenant perspective, one could argue that the attraction for a retailer to be in a shopping centre as opposed to out on the street, is due to the provision of security, says Colman. “This could justify action brought by the tenant retailer against the property owner for not providing adequate security. Similarly, a shopping centre that is repeatedly hit by robberies could see its foot traffic affected, this in turn could lead to a drop in revenue causing retailers to seek recovery from the landlord. If negligence on the part of the property owner can be established, and liability is not limited in the lease agreement, property owners may be held liable.”

Public liability policies must be written on a broad form basis to cover defence costs against any third party litigation. “These broad liability policies can even extend to cover the security companies that are employed to guard the premises,” says Colman.

It is advisable for shopkeepers to have their own policies in place, rather than assuming that they are covered by the overall policy of the shopping mall, as third party attorneys may target the property owner, the shopkeeper and the security company respectively in a suit, concludes Colman.