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