Does public liability insurance cover trespassers on my vacant lot?

Yes, under Australian common law, property owners owe a duty of care to anyone who enters their land, including trespassers. If a trespasser is injured due to a known, unmitigated hazard on your vacant lot (such as an uncovered hole, abandoned machinery or hazardous terrain), you could still be held legally liable and public liability insurance helps cover legal defense and settlement costs.

Is vacant land insurance tax deductible for Australian property investors?

Yes, if your vacant land is held for genuine income-producing purposes (such as leasing the land for commercial parking, grazing, storage or advertising signage), the public liability insurance premiums are generally tax-deductible as an operating expense. However, under ATO rules, if the vacant land is held purely for capital growth without income generation, insurance holding costs generally cannot be claimed as an immediate tax deduction and must instead be added to the asset's cost base.

Does vacant land insurance cover a lot during house construction?

No, standard vacant land public liability policies usually exclude construction risks once building activity commences. Once construction begins, you typically need dedicated owner-builder insurance or ensure the principal builder has active contract works and public liability policies that cover the site during development.

Can I get public liability cover for a lot with a shed or derelict building?

Yes, but you must disclose any physical structures, outbuildings, derelict sheds or ruins to your insurer during application. Insurers may exclude claims relating to deteriorating structures or require safety measures (such as secure perimeter fencing and hazard warnings) before agreeing to provide coverage.

What happens if a tree from my vacant lot falls on a neighbour's house?

If a dead, decayed or unstable tree on your vacant lot falls and damages adjacent property or injures a third party, you can be found negligent if you failed to take reasonable steps to maintain or remove the known hazard. Public liability insurance provides crucial cover for the substantial property damage and third-party repair claims that can arise from falling trees.

Does public liability insurance cover damage to the land itself from a bushfire?

No, public liability insurance is strictly third-party coverage that pays for legal liability arising from bodily injury or damage caused to someone else's property. It does not provide any indemnity or financial reimbursement for physical damage caused to your own soil, fences, landscape or personal assets located on the property.

Vacant land insurance

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Public liability insurance covers claims if someone is injured or their property is damaged on your vacant lot.
Even without physical structures, vacant land carries significant liability risks from trespassers, falling trees and hazardous terrain.
Council requirements and property access agreements often mandate public liability cover before any activity can occur on site.
Policies are relatively affordable compared to built properties, typically starting from a few hundred dollars annually depending on acreage and location.

Yes, having public liability insurance for a vacant lot is important. While you might not have a building or permanent structure on your land, you're still legally liable for anything that happens on it.

Whether you're holding onto land to build on it in the future, looking to sell it or running a business like a car park, accidents can happen, and you could be held liable.

Do I need public liability insurance for a vacant lot?

Public liability insurance covers costs related to third-party injuries or property damage on your vacant lot.

Even if you have signs up warning people that it's private property or warning of potential hazards, you are still liable if someone injures themselves.

It is particularly important to get cover if there are hazards on the land, such as trees that could fall on someone, a body of water or uneven surfaces.

While not legally required in all circumstances, having this insurance is strongly recommended. The cost of a single claim could be devastating for an individual or business.

Finder survey: How often do Australians of different ages compare or switch their public liability insurance?

Response	65-74 yrs	55-64 yrs	45-54 yrs	35-44 yrs	25-34 yrs	18-24 yrs
once a year	3.11%	2.92%	1.45%	2.36%	1.46%	2.86%
I never compare or switch	1.24%	4.09%	1.45%	1.97%	2.91%	5.71%
every 2 yrs	1.24%	1.17%	1.45%	1.97%		1.43%
more than once a year	0.62%		0.48%	0.39%
once every 3+ yrs	0.62%	1.17%	0.48%	0.79%	0.49%	4.29%

Source: Finder survey by Pure Profile of 1112 Australians, December 2023

How much does it cost?

The cost of public liability insurance for a vacant lot varies widely depending on several factors:

Size of the land
Location and terrain
Intended use of the land
Access by the public or workers
Amount of cover required (typically $5 million, $10 million or $20 million)

Generally, insurance for a vacant lot is less expensive than for developed property with buildings. Premiums can start from around $300 to $500 annually for small, low-risk parcels of land, but can be higher for larger or more hazardous properties.

What types of insurance should I consider?

There are several types of insurance to consider for a vacant lot depending on its use and location:

Third-party damages and injuries

Public liability insurance will protect you and your assets against liability for third-party injuries, damages or even death occurring on your land. This type of insurance can also cover activities that may occur in cities such as parking rentals.

If employees are involved in your vacant lot (e.g. security)

Did you know that even if you're not a business owner but part of management as an officer, director or senior manager, you assume financial risk for your employees? For example, say the business where you work also owns a vacant lot next to the building, and the employees use the lot to move equipment around. If an accident occurs due to lack of safety procedures and one of your employees gets injured, you, as part of management, can be included in a lawsuit. Management liability insurance is available that protects both the business's owner and its leadership from such a scenario.

If you have equipment on the lot

If equipment or other items are on the vacant lot, contents insurance will cover those assets. Vandalism and fire are two events that your policy would cover.

Ready to protect your land?

FAQs

Yes, under Australian common law, property owners owe a duty of care to anyone who enters their land, including trespassers. If a trespasser is injured due to a known, unmitigated hazard on your vacant lot (such as an uncovered hole, abandoned machinery or hazardous terrain), you could still be held legally liable and public liability insurance helps cover legal defense and settlement costs.
Yes, if your vacant land is held for genuine income-producing purposes (such as leasing the land for commercial parking, grazing, storage or advertising signage), the public liability insurance premiums are generally tax-deductible as an operating expense. However, under ATO rules, if the vacant land is held purely for capital growth without income generation, insurance holding costs generally cannot be claimed as an immediate tax deduction and must instead be added to the asset's cost base.
If a dead, decayed or unstable tree on your vacant lot falls and damages adjacent property or injures a third party, you can be found negligent if you failed to take reasonable steps to maintain or remove the known hazard. Public liability insurance provides crucial cover for the substantial property damage and third-party repair claims that can arise from falling trees.

Finder writers are subject matter experts and use primary sources, in-depth research and interviews with other experts to ensure you're getting accurate, up-to-date information. Articles are fact checked in line with our editorial guidelines.
1. Insurance Council of Australia: Understand Business Insurance
2. Australian Taxation Office: Deductions for vacant land

Thank you for your feedback!

Written by

Brad Buzzard

Writer

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Brad Buzzard was a content writer at Finder working across insurance including travel, life, health, business, car, pet and home. Brad brought with him a wealth of experience as a journalist, content writer, social media manager and researcher, being in the industry for almost 2 decades by the time he joined. Before working for Finder, Brad’s expertise could be seen across TLC Marketing, Reborn, DDB Group, We Are Social, Nielsen and Wheeling News- Register, varying across Australia and the United States. See full bio

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2 Responses

JacquiNovember 25, 2024

Do you cover land insurance while a house is being built prior to lock up stage

Finder

AngusNovember 26, 2024Finder

Vacant land insurance is specifically for undeveloped lots. Once you’ve begun construction, you’ll want to consider owner builder insurance if you’re building yourself.

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Vacant land insurance

Public liability insurance is a cost effective way of protecting yourself if you own vacant land.

Key takeaways