safety management
Managing risk

A guide to public liability insurance

Whether you work in hospitality, retail, construction or any other sector where you deal with the public, the risk of injuring someone or damaging their property is an important consideration.

Public liability insurance can cover you and your business if someone is injured, or their property is damaged, during the course of your work. 

What is public liability insurance?

Public liability insurance is designed to cover you if your business becomes legally liable in the event someone is injured or their property is damaged as a result of dealing with your business.

Unlike professional indemnity insurance, which covers advice and services you provide, public liability insurance covers injury and damages caused by physical surroundings and property.

For example, if someone slips on a wet floor in a shop and sustains an injury, public liability insurance would cover the cost of compensation and related expenses.

What does public liability insurance cover?

Typically, public liability insurance will cover you for the following:

  • injury to someone else – for example, if someone trips over equipment at your business and injures themselves
  • damage to someone else’s property – for example, if you’re moving furniture for a customer and accidentally break their glass coffee table
  • legal costs – legal defence and compensation costs related to a claim against you
  • injury or damage caused by products – some policies cover products as well, such as if someone gets sick after eating undercooked seafood at your restaurant
  • damage to property in your control – for example, if you're parking a customer’s car and accidentally scratch the side mirror.

Some policies will also allow you to get cover that extends beyond your normal business activities. For example, a cafe owner might choose to be covered for food served to employees, in addition to their regular customers.

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How much does public liability insurance cost?

There are several factors that can impact the cost of public liability insurance, such as:

  • industry – some industries are considered higher risk than others, which can lead to higher insurance costs. For example, the risk of injury or damage in a cafe is lower than that on a building site
  • number of employees – the more employees you have, the higher insurance premiums tend to be
  • policy structure – you could be able to save on your premium by bundling public liability insurance with another type of insurance, or choosing a higher excess (the amount you pay out of pocket if you make a claim).

Finder reports that the average small business owner, such as a sole trader, can expect to pay about $80.75 a month in public liability insurance. Costs can go up to over $600 a month for a high-risk business such as a construction company. 

Do you need public liability insurance?

While it isn’t compulsory, if you interact with the public in any way during the course of your work, you would likely benefit from public liability insurance cover. Industries that commonly have public liability insurance include:

  • trades
  • hospitality
  • retail
  • health
  • entertainment
  • real estate
  • transportation.

Depending on your industry, there may also be clauses in client or supplier contracts that require you to have public liability insurance.

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Disclaimer: The guidance provided is general in nature. The guidance is factual information only and is not intended to be financial product advice, legal advice or tax advice and should not be relied upon as such. The guidance has been prepared without taking into account your personal objectives, financial situation or specific needs. Before acting on any guidance you should consider the appropriateness of the guidance having regard to your objectives, financial situation and needs. Before making any decisions, it is important for you to consider these matters and to seek appropriate financial, legal, tax, accounting and other professional advice. 

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