Explore Business Insurance

It takes long hours and extensive planning to safeguard your business’ growth and success, and you don’t want to be left blindsided by the unexpected. For this reason, public liability insurance* can be one of the most important considerations when starting up or maintaining a business.

What is public liability insurance?

Public liability insurance is designed to protect you and your business should a customer, supplier or member of the public bring a claim against you for injuries or property damage caused by your negligent business activities.

As a business owner, you have a duty of care to any third party that comes into contact with your business and its activities. Businesses open to the public can be especially vulnerable to third party accidents, which can result in costly public liability claims.

Having an adequate level of cover for your business can help you avoid potentially crippling litigation fees and continue your day-to-day operations.

What public liability insurance typically covers

Public liability insurance usually covers:

  • Any loss or damage your businesses causes to third party property
  • Your legal liability for the personal injury or death of a third party
  • Any compensation you’re ordered to pay as a result of a covered claim
  • Legal costs incurred in defending a covered claim

Your business type and size directly affect the level of public liability insurance you may require. For example, a rock climbing business holds an inherent risk of injury to clients, so these business owners would typically need greater public liability coverage and will likely pay a higher premium as a result.

Conversely, a florist may face a smaller risk and therefore only require a lower level of coverage. While it’s not a legal obligation in Australia, it’s strongly recommended all businesses consider public liability insurance.

a waitress serving coffee in a cafe insured with public liability insurance

What it doesn’t cover

Before taking out public liability insurance, it’s crucial to understand what isn’t included in your coverage. The policy wording in your Product Disclosure Statement (PDS) will tell you what’s excluded by your policy. However, typical exclusions include:

  • Your responsibility for your injured workers. This is covered through workers’ compensation insurance.
  • Punitive damages. The extra damages awarded if a judge believes your behaviour was exceedingly reprehensible.
  • Product recalls and withdrawals. Expenses that arise when your business’ products are recalled from the market.
  • Asbestos. This includes incidents involving asbestos materials. This is typically covered under asbestos liability insurance.
  • Aircraft products. They are usually covered under different levels of aviation insurance.

Whether you’re operating your business in QLD, NSW or any other state within Australia, you should check for any state-specific public liability requirements with your insurer.

Why might I need public liability insurance?

From a customer’s slip and fall to accidentally knocking your coffee over a client’s laptop, accidents can happen – and they can cost your business significantly in legal action. Although it’s an added expense, public liability coverage is one bill that may save your business operations from grinding to a halt.

Case Study: Slip and Fall

Let’s use an example of how public liability insurance can benefit your business.

A pipe in a store has leaked water all over the floor and the employees have not put out a caution sign to warn customers of the hazard. An unsuspecting customer slips in the puddle and severely injures their wrist, which now requires expensive ongoing treatment.

The injured customer makes a claim against the store for compensation since the business didn’t take reasonable care to avoid harm to their customers. The payout amounts to $100,000, far more than the store would be able to afford without their public liability insurance to help.

Combining different types of insurance together

There are a number of business insurance policies and coverage types to choose from. Many insurers offer business insurance packages that combine several types of policies into one single payment.

When comparing business insurance with Compare the Market, you’ll be able to select which types of cover you wish to include based on your business needs. Compare business insurance today for free.

Frequently asked questions

How much is public liability insurance?

Public liability insurance premiums vary depending on things like the limits, optional coverage, nature, turnover and size of your business, as well as the industry in which your company operates. Typically, the larger your business and the higher its risk for causing injury or damage, the higher the cost of public liability insurance.

For example, a small cafe owner may pay a cheaper premium due to their reduced size and business demand, which may result in less risk. On the other hand, someone running a large construction company will typically pay much more to insure their business against public liability claims because of their larger workforce and risk to the public.

To find out how much you could potentially pay for public liability insurance, you can compare your options and get a quote with us.

What’s the difference between public liability insurance and professional indemnity?

They may sound similar, but public liability insurance and professional indemnity are two very different products. Public liability insurance covers you when your negligent business’ day-to-day activities cause injuries or damage to a third party, while professional indemnity covers claims for loss or damage caused by bad advice or mistakes in your service.

Let’s use an example. Jenny is a real estate agent who’s expecting a potential client for a meeting. The client arrives at Jenny’s office but trips over the uneven floorboard that Jenny had meant to fix for ages. The client suffered an injury and sues Jenny’s practice. Her public liability insurance steps in to handle the claim and its costs.

In another example, Colin is an accountant who gave bad financial advice to a client who then suffers monetary damages. The client sues Colin to recoup their losses, and Colin enlists his professional indemnity insurance to cover his legal costs.

Does public liability insurance cover injury or damages caused by products for sale?

Public liability insurance can cover personal injury or damages to the public that happen on the business premises or as a result of your negligent business activities. It doesn’t cover claims for damages or injuries caused by the products your business manufactures, supplies or sells.

Specific damages caused by a product are covered by product liability insurance. This insurance covers the related legal fees that might arise if your product malfunctions or hurts someone.

Is public liability insurance compulsory in Australia?

There is no overarching statutory requirement in Australia for a business to have public liability insurance. However, there are a few industries and professions that do mandate having public liability insurance, and the requirements can change between the states and territories.

Public liability insurance in

NSW

VIC

QLD

WA

SA

TAS

ACT

NT

Not mandated by state law.¹Not mandated by state law.²Not mandated by state law but may be required in certain industries.³Not mandated by state law.⁴Compulsory for certain types of businesses.⁵Compulsory for certain types of businesses.⁶Not mandated by state law.⁷Not mandated by state law.⁸

Even if your industry doesn’t require public liability insurance, though, it can still be still a vital part of protecting your business against potentially damaging third party claims.

If your small business was hit with a $100,000 claim from a member of the public for an injury they sustained at your premises, how would you cope with the legal cost and the payout without some form of insurance?

Can I get public liability insurance if I’m self-employed?

Yes, you can! Anyone in business can get public liability insurance. Public liability insurance can help your business handle the cost of third-party claims for injuries or property damage, and those who are self-employed probably face enough costs already without those added on!

Sole traders can also get public liability insurance, and you can find out more in our guide to business insurance for sole traders.

Stephen Zeller, General Manager

Meet our Business Insurance expert, Stephen Zeller

As our General Manager of Business Insurance, Stephen Zeller says public liability insurance is designed to protect you and your business if a supplier, customer or member of the public makes a claim against you. Stephen believes in educating customers about the benefits of public liability insurance so that they can reduce the risk of financial loss.

With over 30 years’ experience in the financial services industry, including 27 years at the Bank of Queensland, Stephen is Compare the Market’s leading expert in business insurance. He’s also a long-time customer rights advocate and an allied member of the Australian and New Zealand Institute of Insurance and Finance (ANZIIF).

Stephen’s public liability insurance tips:

  1. Pay your insurance annually as this is typically a cheaper alternative to monthly payments.
  2. It’s critical that you understand what you’re accountable for as a business owner when it comes to the safety of anyone on the business premises (including suppliers, customers and contractors). If any damage or incident occurs to someone you can be liable so it’s vital you have preventative safety measures in place. For example, make sure there are no loose electrical cords, cluttered aisles or slippery floors etc.
  3. Business owners often believe that their staff are covered under public liability insurance. This is generally not the case as staff are covered under Worker’s Compensation.
  4. Claims against your business can be costly but also impact your reputation. Suitable public liability insurance can help mitigate these factors by dealing with the claims.
  5. Always read the PDS to understand all your inclusions, exclusions, the claim process and details regarding your public liability insurance policy.

Cover your business today

No matter what industry you work in, it’s easy to get covered in the event of a public liability claim. To protect all you’ve worked for, compare business insurance and get a free quote through us.

* This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.

Sources

1. NSW Government: Service NSW – Get liability insurance for your business. Accessed November 2021.
2. Victoria State Government: Business Victoria – Find the right insurance. Accessed November 2021.
3. Queensland Government: Business Queensland – Business insurance. Accessed November 2021.
4. Government of Western Australia: Small Business Development Corporation – Insurance. Accessed November 2021.
5. Government of South Australia – Insuring your business. Accessed November 2021.
6. Tasmanian Government: Business Tasmania – Fact sheet – Business insurance. Accessed November 2021.
7. Australian Government – Business insurance: Insurance in your state or territory. Accessed November 2021.
8. Australian Business Licence and Information Service: Northern Territory – Territory Business Information Kit: Information Pack. Accessed November 2021.

Let’s get down to business

Getting business cover can be simple! Review your options in minutes.

Compare business insurance