Public Liability Insurance

Who needs Public Liability Insurance?

Public liability insurance is recommended for any business that interacts in public places or has members of the public visit their premises. In every line of work, there’s always the potential for something to go wrong – and accidents do happen.

Claims of personal injury or property damage can be incredibly expensive. Even if you’re not at fault, you may still incur considerable legal costs while defending a claim.

Public liability insurance can help safeguard your business by providing cover against such claims, including legal defence costs. So you can confidently go about your work, knowing your business has a level of protection if something goes wrong.

Public Liability Insurance may be a necessary requirement before licences for certain trades are issued. It is one of the most basic insurance products needed by businesses. In our opinion, if your work interacts with members of the public in any way, or if you have a physical business site where members of the public can attend, then public liability insurance  is highly recommended. 

If you work from home, and only perform your work online (without any physical interaction with members of the public), then you may not need public liability insurance.

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.

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. 

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.

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. 

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.

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. 

As with all types of insurance, there are certain exclusions which apply under public liability insurance. You should thoroughly read your Policy Wording and speak to your broker to understand them. Examples of standard exclusions include claims relating to:

• Punitive damages which a court decides to be paid on top of compensation 
• Damage to property you own or that is in your care
• A cyber attack experienced by your business     
• Allegations of defamation brought against you

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 be taken to the HIAIS website.

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.

Professional indemnity insurance helps provide cover for claims made against your business by third parties claiming that your specialist services or advice caused them financial loss. Public liability insurance helps you to pay the costs associated with a third party injuring themselves or damaging their property while on your premises, or due to using products that you offer.