Public Liability Insurance in Australia

No matter what industry you work in, getting public liability insurance should be at the top of your checklist.

To all occupations and industries: Whether your in the construction business or you run a small motel, the risk of injuring someone or damaging their property shouldn't be ignored. In just 2017 alone¹, there were 30,000 liability claims reported in Australia for accidents that occurred in 2017. This doesn't even include accidents that occurred in years prior.

Luckily, public liability insurance is designed specifically to cover the above. It provides necessary financial protection for costly lawsuits e.g the cost of compensation and any legal expenses if someone sues you for being injured on your worksite.

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If you are ready to speak with a consultant about different business insurance options available, simply enter your details in the form. Keep reading if you want to learn more about the different types of cover available.

Compare public liability insurance quotes for July 2018.

We used our engine to grab a quote estimate for an electrician with three people employed and with an annual turnover of $70,000.

^{Note: Your quote will vary based on your specific details. Quotes last generated on 30 July 2018.}

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  • Get quotes from Australian brands.
  • Find the right public liability cover for a range of occupations.
  • Customise your policy to suit your business.

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	Details	Features
Business Liability Insurance	Tailored made cover with a wide range of additional options to choose from. Up to $20 million in liability cover and choice of excess.	$20 million in liability cover Consumer protection cover for Queensland electricians 24/7 emergency claims assistance Optional cover for Money, Business Items and Stocks	Go to site More info

What is public liability insurance?

What is and isn't covered

Public liability insurance has a specific use. Here's what is and isn't covered:

Note: Professional indemnity insurance is offered by insurers in conjunction with public liability insurance.

Do I even need public liability insurance?

After worker's compensation, public liability insurance is one of the foundational forms of cover that very few occupations should go without. It's not mandatory in most cases, but lawsuits of this sort can affect almost any type of business and put you on the hook for large sums of money.

• Costs that can arise from a liability claim
• Examples of public liability

Look no further than the claims data

A snapshot of Australia. In 2017¹ there were over 30,000 claims reported for accidents that occurred in 2017 and 36,000 reported for accidents that occurred in 2016. If we go back four years to 2013, we can can get a snapshot of liability incidents by state and type.

Australian Prudential Regulation Authority, 2014. Note: incidents takes into account claims reported and an estimate for claims unreported.

• See the details

  State / Territory	All incidents	Injury incidents	Property damages	General losses
  Total (Australia)	31,899	9,302	20,770	1,827
  New South Wales	9,667	3,279	5,759	629
  Victoria	6,583	1,489	4,738	356
  Queensland	8,431	3,013	4,969	449
  South Australia	2165	426	1,646	93
  Western Australia	3707	718	2,823	166
  Tasmania	767	236	496	35
  Northern Territory	106	15	84	7
  Australian Capital Territory	424	169	228	27

• Still not convinced?

  There are some key questions if you are still not sure

  • In the event of a claim, would I be able to cover the legal expenses that may be occurred? Court and lawyer fees can add up extremely quickly.
  • How might your business suffer if you were forced to take time out of work frequently to attend court hearings? Would you be required to hire alternate staff to step in for you while you were absent?
  • In the event that you were found liable for damages, would you be able to rely on capital that your business had saved to cover losses?
  • In the event that you were required to close your business temporarily, would you be able to handle potential losses sustained from clients taking their business elsewhere?
  • Could you afford to lose staff if you were no longer able to cover their wages?

What industries usually need public liability cover?

As mentioned previously, almost all businesses would benefit from this protection. Here are some obvious examples:

• Retail. Grocery stores, book shops and department stores have physical locations with lots of foot traffic, increasing the chances of someone getting injured.
• Health and beauty. Gyms, physical therapy centres and hair salons also bring the public into their premises. Even solo professionals may need public liability if they carry equipment that could damage or injure a member of the public.
• Hospitality. Restaurants, bars, clubs and cafes bring in lots of people while also creating a fast-paced environment where injuries are more likely.
• The trades. Any business or independent contractor operating on a work site would benefit from public liability insurance, and in some cases are required by law or by contract to have it.
• Entertainment. e.g. dancers, performers, event organisers, etc.
• Real estate e.g. Landlords, Strata management.

It’s important to remember that public liability will protect business in these industries if they cause injuries or damage that are not related to the professional service provided.

Do small businesses need public liability insurance?

Regardless of business size, public liability insurance is suitable if the business has a physical premise or operates in public (such as a mobile business). Small businesses that fall into this category include:

What's covered?

What is and isn't covered?

• Covered
• Not covered

Who is covered under a public liability insurance policy?

When a business takes out a public liability policy, the policy will protect the business and people directly employees by the business, including:

• The business itself
• The company directors
• The employees of the business
• Business partners

Contract workers are usually not covered by a business policy, so either the worker or the business would have to take out extra cover if they want to be protected from that person's actions.

Questions everyone asks when it comes to public liability

What is the difference between...

Public liability insurance, product liability insurance and professional indemnity insurance?

What follows is a quick rundown, but you can also check out our detailed guide for a fuller explanation.

Do I need all three types of liability insurance?

Each of these products covers a different set of situations. That means you won't be able to buy public liability insurance and have it cover situations that are more suited to professional indemnity (or vice versa).

Insurers will sometimes bundle public liability and product liability together and call it something like business liability insurance, public and products liability insurance or just liability insurance. If you need both types of these, a combined policy like this is just fine. Just read the fine print to make sure it covers both sets of circumstances, and don't forget to add professional indemnity insurance if you need that too.

Can I combine public liability and professional indemnity under one policy?

Professional indemnity insurance covers the professional and his or her actions but does not provide cover for an accident that may take place on the professional’s premises when a customer is present. The professional will have to purchase public liability insurance cover as part of his or her full insurance package.

Is public liability insurance compulsory?

Carrying public liability insurance in Australia is generally not mandated by law, although different states can require it for particular industries. You may also be required to carry it if you enter into a contract that says you must. Here are a few scenarios where you'd be contractually obligated to carry public liability insurance:

• It's required to earn your licence. Some states will require you to hold this insurance if you work in an industry that is especially prone to accidents. For example you can't get your electrical contractor license in Queensland unless you hold this cover.
• It's required for a particular job. If you're a subcontractor on a large worksite, the builder may require that you hold public liability insurance.
• It's required to hire a venue. If you are organising public event and have hired a venue, the venue owner or local council may require you take out a public liability policy.

Contract or not, public liability insurance is a foundational form of protection that most business owners should consider. Lawsuits can run into the millions of dollars and could easily become the biggest financial liability to your business.

Comparing and buying cover

How do I compare public liability insurance policies?

We'd usually recommend using a broker to help you compare policies, because there's a lot more to business insurance than just public liability. A broker will consult with you to determine the appropriate package, and then go off and find you the best value for your money.

But if you want to go it alone, here are a few questions to ask yourself as you mull your options:

How much does public liability insurance cost?

The cost of your policy is entirely dependent on your business' unique circumstances. The insurer will analyze your business to determine the likelihood that damage or injury could occur, and they'll use that to calculate your premiums.

Depending on the nature and size of your business, the cost could be anywhere from a few hundred to tens of thousands of dollars per year.

Here's what an insurer will take into consideration when coming up with your premium:

How to get cheap cover

While you don't want to skimp on a product that could literally save you from millions of dollars in damages, there are still ways you can save some money. Here's what you can do:

Some final questions you might have

• What level of public liability coverage should I buy?

  The indemnity limit has to be chosen on the level of risk your business is taking every day. For some industries, there are minimum levels, normally around $5,000,000.

• Is public liability insurance mandatory?

  It depends on the state. You should check with your state insurance commission whether your business should have mandatory public liability insurance. However, employers’ liability insurance is required by many states.

• Does it cover staff and employees?

  Yes, but in most cases subcontractors are not covered.

• Does it cover tradesmen?

  Yes, as it is one of the biggest segments of the market.

• Can it be paid monthly?

  Yes, you can pay it in monthly instalments.

• Does Public Liability Insurance cover defective work?

  Yes. Defective or faulty work can be covered, however only certain costs are eligible for cover. Generally the damages and injury incurred from the faulty work will be covered but there is no cover for the additional costs incurred for rectifying the defective work.

• What is Broadform Public Liability Insurance?

  Broadform Public Liability Insurance is the term given to policies that provide cover for both Public Liability and Product Liability. Not all policies will automatically cover both product and public liability so it is crucial to check the policy terms when signing up for cover.

• How much cover can you take out?

  Generally, when you decide to buy public liability insurance, you decide the amount to insure, the so-called limit of indemnity, depending on the possible damage you could cause. This limit is usually set over $500,000 or $1,000,000. Public liability insurance coverage depends on the damage request of a third party. If the court or the judge states that you are accountable for financial compensation, this policy can cover all the claims up to the limit of indemnity.

• Does Public Liability Insurance cover accidental damage?

  Yes. Public Liability Insurance will generally provide cover for accidental damage to property that is owned or controlled by a third party.

• Can I get Public Liability Insurance for a one off event?

  Yes. There are a number of specialist insurers that offer Public Liability Insurance for one off events. Most larger insurance brands will not provide cover for single days/events but can extend cover to include additional cover that may be required for these events.

• Should I work with a broker to apply for cover?

  Finding the right policy to give adequate public liability cover for your business is no easy task. Failure to determine an appropriate level of cover can have devastating impacts on a business. This leads many businesses to enlist the services of a broker to help them find an appropriate cover option. Generally, a broker will:

  • Provide risk management advice based on the nature of the insured’s business by conducting an analysis of a business’s risks and suggesting ways that these risk factors can be minimised
  • Provide a quote for the business and offer recommendations on available insurance products
  • Help the business determine an adequate level of cover based on the risk of liability they face through the provision of their services
  • Provide advice on the different product features and exclusions that the insured should be aware of
  • Once an insurance package has been selected, the insurance broker can finalise and provide the paperwork for the insurance product
  • If at any time a claim is made against the business this will be followed up by the insurance broker from the commencement of the claim to its closing stage

• Can contact workers take out Public Liability cover?

  When you’re a contract worker, public liability insurance offers many potential benefits. As a contractor, you run your own business and can be held legally responsible for your own actions, so you need to have an adequate level of financial protection in place if any claims are brought against you. Similarly, if you’re a subcontractor, you probably won’t be covered by the main contractor’s insurance policy, so public liability cover is an important consideration. Without public liability insurance in place, the financial consequences of a claim made against you could be disastrous. The good news is that it’s quite easy for contract workers to take out cover. Shop around for an insurer that allows you to tailor a policy to suit the specific cover needs of your business, and take advantage of the financial protection and peace of mind that this type of cover offers.

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References:

https://www.apra.gov.au/sites/default/files/Table%25202%2520-%2520PPL.xlsx