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 accident was the fault of the business for not taking 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.
Public liability insurance premiums vary depending on the type, needs, 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.
They may sound similar, but public liability insurance and professional indemnity are two very different products. Public liability insurance covers you when your business’ day-to-day activities cause injuries or damage to a third party, while professional indemnity covers claims for loss or damage that occur due to 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 suffers 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.
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.
|Not mandated by state law.¹||Not mandated by state law.²||Not mandated by state law but may be required in certain industries.³||Not mandated by state law.⁴||Compulsory for certain types of businesses.⁵||Compulsory for certain types of businesses.⁶||Not mandated by state law.⁷||Not 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?
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.
1. NSW Government: Service NSW – Get liability insurance for your business. Accessed April 2020.
2. Victoria State Government: Business Victoria – Find the right insurance. Last updated October 2019. Accessed April 2020.
3. Queensland Government: Business Queensland – Insurance. Last updated July 2018. Accessed April 2020.
4. Government of Western Australia: Small Business Development Corporation – Insurance. Accessed April 2020.
5. Government of South Australia – Insuring your business. Last updated December 2016. Accessed April 2020.
6. Tasmanian Government: Business Tasmania – Fact sheet – Business insurance. Accessed April 2020.
7. Australian Government – Business insurance: Insurance in your state or territory. Accessed April 2020.
8. Australian Business Licence and Information Service: Northern Territory – Territory Business Information Kit: Information Pack. Accessed April 2020.