If your business deals with customers, visitors, suppliers or the general public, public liability insurance is one of the most important covers you can hold. A single injury claim can involve legal costs and compensation that far exceed what most small businesses could pay on their own. But how much cover do you actually need?
What Is Public Liability Insurance?
Public liability insurance covers your legal liability if a third party is injured, or their property is damaged, as a result of your business activities. It can cover compensation payments as well as legal defence costs, subject to the policy terms.
Examples include:
- A customer slips on a wet floor in your shop
- A tradie accidentally damages a client’s expensive flooring
- A visitor trips over equipment at an event you are running
Common Cover Limits
In Australia, public liability policies are commonly offered with limits of $5 million, $10 million or $20 million per claim or occurrence. The right amount depends on several factors:
- Contract requirements: Many commercial clients, councils, shopping centres and government bodies require a minimum of $10 million or $20 million.
- Your industry: Higher-risk work, such as construction or working at heights, usually warrants higher limits.
- The public you interact with: Businesses with high foot traffic face more exposure.
- Property you work on: Working in high-value homes or commercial sites increases potential property damage claims.
What Affects the Cost?
- Your industry and the activities you perform
- Annual turnover and number of staff
- Claims history
- Limit of indemnity and excess chosen
- Where you work, including any work overseas or in the USA and Canada
What Public Liability Doesn’t Cover
Public liability does not cover injuries to your own employees (that is workers compensation), professional advice errors (that is professional indemnity), or damage to your own property. Many policies also exclude certain high-risk activities unless specifically agreed.
Products Liability
If you make, import, sell or distribute products, you may also need products liability, which covers injury or damage caused by those products. It is often packaged with public liability as “public and products liability”.
Our Advice
When in doubt, consider your contracts and the worst realistic claim you could face. The difference in premium between $10 million and $20 million is often smaller than people expect.
Get the Right Level of Cover
Gidda Insurance Brokers helps businesses across many industries choose a public liability limit that matches their risk and contract requirements, and we can issue certificates of currency quickly when you need them. Explore our services or contact us on 0491 999 555.
This article contains general information only and does not take into account your objectives, financial situation or needs. Before making a decision, consider whether the cover is appropriate for you and read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD). Gidda Insurance Brokers Pty Ltd is an Authorised Representative (No. 001307383) of Regis Licensing Pty Ltd ABN 71 130 820 727, AFSL 338156.
