What is Public Liability Insurance?
Public liability insurance protects your business against claims of personal injury or property damage made by a third party because of your negligent business operations. For example, if someone slips, falls, and injures themselves on your business premises, or their property is damaged while you’re providing a service, they may take legal action against you or your business to recover their loss.
Read our comprehensive guide on Public Liability Insurance here to learn more.
What does Public Liability typically cover?
Damages you’re legally responsible to pay a third party for the personal injury or property damage caused by your negligent business activities. This can also include their legal fees.
Your legal costs incurred in responding to the claim, even if a court decides you’re not liable to the third party.
What does Public Liability typically not cover?
- Claims of injury made by you or your own employees
- Damage made by you or your employees to your own / business property
- A cyber-attack experienced by your business
- Allegations of defamation brought against you
Who needs Public Liability Insurance?
Public liability insurance is designed for professionals and businesses who interact with clients, customers, or members of the public or if your business operates in public spaces.
Public Liability Claims Examples
Margaret* was walking down the escalators at a shopping centre, when she slipped and fell. She suffered severe cuts as a result of the fall, as well as a fracture. It had been raining that day, and while there were warning signs, and non-slip mats throughout the centre, the floor was still wet due to customers coming in. Due to the injuries suffered by Margaret, she took legal action against the centre as she believed her injuries were due to the shopping centre’s negligence.
The shopping centre was required to pay Margaret compensation, as they were held legally liable for her injuries. Public Liability Insurance held by the shopping centre covered the cost of legal representation for the owners of the shopping centre, as well as the compensation required to be paid to Margaret.
Debbie* was an elderly woman who enjoyed travelling. She rented a holiday home managed by Grant*. As she sat on a plastic chair on the balcony, the chair broke under her weight. Debbie suffered serious injuries as a result of this fall. She took legal action against Grant, as well as the owner of the property as she believed they were negligent in keeping a defective chair at the holiday apartment. Grant’s Public Liability Insurance arranged through Aon was able to help cover the legal fees he incurred in defending himself, as well as the compensation he was required to pay Debbie.
Do I need Public Liability Insurance if I am self-employed?
Public liability insurance is highly recommended if you’re self-employed, and have a physical business premises where clients or other members of the public can visit you. Even if you don’t have clients visiting you on your premises, you may also require it if you have any form of contact with members of the public.
Do I need Public Liability Insurance if I’m an employee?
If you’re an employee of an organisation and your employer has public liability insurance in place, you may not need to take out your own policy, however it’s always a good idea to ask your employer to check their insurance policy to ensure it is current, and covers actions of employees.
Is Public Liability Insurance tax-deductible?
According to the Australian Taxation Office, you may be able to claim the cost of any premiums you pay for insurance against the loss of your income. You should always speak to your accountant to check your eligibility to claim expenses.
Does Public Liability Insurance cover employees?
If an employee suffers an injury while working for your business, public liability insurance will not provide any coverage for this. If your business employs staff, you will need to take out Workers’ Compensation to cover staff members.
I’ve taken out Business Insurance, do I need Public Lability Insurance as well?
Public liability insurance can be taken out as a standalone policy, or as part of a business insurance policy. If you’ve selected public liability when taking out your business insurance policy, then you don’t need to take out another public liability policy separately.
What is the difference between Public Liability and Product Liability?
Public liability insurance covers your legal liability caused directly by your business activities or on your business premises during the course of your work. Product liability insurance covers loss or damage caused by products your business sells. For example, if you operate a catering business, and food you serve makes someone sick, you could be held liable to pay damages and the cost of their treatment. If you are a professional providing a service, product liability may not be applicable to you. Instead, if a client alleged your service or advice caused them financial loss or injury, you would need professional indemnity insurance to help cover this.
I’m a tradie, can I arrange Public Liability Insurance through Aon?
If you’re a builder, tradie or subcontractor, Aon can arrange public liability insurance as part of our joint venture with Housing Institute of Australia – click here to visit the HIAIS website.
As a professional, what other types of insurance might I need?
If you are a small business owner operating a professional practice, there are a few types of insurance you may need. Consider your objectives and financial situation when deciding which policies you take out. Other types of insurances available to small business owners include:
- Professional indemnity which helps protect you against claims made by clients alleging they suffered injury or financial loss due to a service you provided.
- Business insurance which covers your business premises and contents against events such as fire, theft or other listed events. Public liability insurance can also be purchased as part of a business insurance policy.
- Cyber insurance is also available for certain professions, which is designed to protect businesses from a range of internet based risks.
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