Public Liability Insurance

As a business owner, you know you have to look after your employees. On top of that, you also have a responsibility to look after your customers, suppliers and anyone else involved in the business. If you don’t, you could find yourself having to pay off some pretty expensive legal fees and damages if you’re sued for negligence. That’s where Public Liability insurance could help.

What is Public Liability Insurance?

In Australia, business owners have a duty of care to take reasonable steps for the safety of any third party that comes in contact with their business. Public Liability insurance^ can help cover legal fees and compensation costs if a customer, member of the public, or a supplier claims against you for injury or damage to their property as a result of your alleged negligent business activity.

Let’s say it’s a cafe. The business owner has a responsibility to look after the coffee supplier, the person buying a coffee and even the person who’s just sitting inside the cafe using the wifi. If one of these people got hurt or sustained property damage whilst being inside the cafe, they could bring a claim against the cafe owner. Public Liability insurance is there to help protect the business owner, in this case the cafe owner, from the financial impact of any such claims.

Who can bring a liability claim?

A public liability claim could be brought against you for:

• Injury or death of a third party as a result of your negligent business activities
• Damage to a third party's property as a result of your negligent business activities

What does Public Liability Insurance typically cover?

If you find yourself in a situation where your business was found negligent, public liability insurance can help cover the compensation awarded to the injured/impacted person as well as legal fees. Like all insurance policies, you need to check to see what your policy actually covers and any limits. A typical policy may cover you for some or even all of the following:

• Legal costs that might arise from the defense or settlement of a claim
• Loss or damage to property, including covering the loss or damage of a third party's property that was in your control or while you were performing your service. As well as loss or damage of goods in your care
• Cover for employees who may have been involved in the incident or who were acting on your behalf and against whom a claim is made.
• Injuries on your premises, for example, if a third party falls over while visiting your business, you’re covered. First aid costs can also be included.

What doesn’t it typically cover?

Like all insurance policies, a public liability insurance policy will come with exclusions, so it’s important to check what these are. Here’s a list of some of the things that typically aren’t covered:

• Responsibility for injured workers:Which is typically covered in your Workers Compensation.
• Asbestos:Including incidents involving asbestos materials
• Punitive damages:If a court determines your behaviour was exceedingly negligent, you may face extra penalties.
• Gradual pollution:Such as leaking pipelines or underground storage tanks causing contamination.
• Product recall:Which are expenses that arise when a product is recalled.
• Aircraft products:For this, you would need specific aviation insurance.
• Claims arising from a professional service you provide (These are typically covered by a professional indemnity policy).

Are my employees covered by Public Liability insurance?

Generally speaking, the answer is no. Public liability insurance protects you from claims by customers, suppliers and the general public. It typically doesn’t cover employees who injure themselves on the job. This can be covered by workers compensation insurance, which is generally mandatory for Australian businesses.

However, there are some cases where you might be able to claim a person’s injury on your policy because they’re not technically an employee. For example, work experience students or labour workers. It comes down to what’s included in your policy, so make sure you know what you are and are not covered for before you sign up.

Also, if a public liability claim is made against your employee, and they were acting in the course of their employment when they caused the injury or property damage in question, the policy will typically cover them.

What factors could affect my premium?

One of the first things your insurer may look at is the size and type of your business. For example, a bungee jumping business could be deemed a riskier than a florist. This means the business owner may require a greater level of cover which in turn could mean a higher premium. Your insurer may also look into your claims history and the location of your business.

What kinds of businesses is Public Liability cover relevant for?

A lot of people think Public Liability Insurance isn’t mandatory but depending on your business and what state you’re in, it might be. For example, plumbers in Victoria and electricians in Queensland and Tasmania require it as part of their licensing process. In some industries there’s also a requirement for you to hold a minimum level of cover to be a member of the industry association. Generally, businesses that deal with members of the public or operate in public areas could benefit from it.

Check out the state guides below to find out whether you could be required to have it:

• New South Wales
• Queensland
• Western Australia
• South Australia

Whether it’s compulsory or not, as a business owner, Public Liability insurance is something that’s worth  considering as a financial safety net should something unexpected occur.

What businesses could be exposed to a Public Liability claim?

Here’s a list of just some of the businesses which could be exposed to a public liability claim:

• Allied Health Care
• Agricultural Contractors
• Alarm Installers and CCTV Installers
• Builders
• Commercial Property Owners
• Cleaners
• Cafes, bars and restaurants
• Carpet Layers and Flooring installers
• Ceiling Installers
• Concreters
• Drain Cleaners
• Electrical Contractors, Electricians
• Fork Lift Truck Servicing, Fork Lift Truck Training, Forklift Maintenance, Contractors
• Gardeners
• Heating and Ventilation Contractors
• Industrial Plant Repairer
• Metal Fabricators
• Plasterers
• Shop Fitters
• Solar Panel Installation
• Stonemasons
• Tradies
• Air-conditioning Contractors
• Beautician Mobile/Chair in Salon
• Bricklayers
• Carpenters and Joiners
• Carpet and Upholstery Cleaners
• Computer Repairs and Maintenance
• Caterers
• Fencing Contractor, Fencing Installers
• Forestry Contractors
• Frensh Polishers and upholsterers
• Glazing Installers, Glazing Contractors, Glaziers
• Gas Fitters
• Grave Diggers
• Groundworkers
• Hairdressers
• Heating Contractor
• Hydraulic Engineers
• Manufacturers
• Plumbers
• Roofing Contractors
• Window Cleaners

Should I get Public Liability insurance?

Still wondering if Public Liability insurance could be beneficial for your business? Here’s a couple of questions to consider:

• Do I work with clients, customers, or suppliers in public spaces?
• Do I visit spaces owned or controlled by others?
• Do visitors come to my premises?
• Do I manufacture products/goods?

If you said yes to any of the above, it might be worth considering taking out a policy.

What’s the difference between Public Liability and Professional Indemnity?

A lot of people get confused between Public Liability and Professional Indemnity Insurance. So we’ve broken them down for you:

Professional Indemnity Insurance^ can help protect you against losses claimed by a third party due to alleged or actual negligence or errors in your professional services or advice. For example, a customer could sue you for damages if it’s alleged that your recommendation has caused a loss. This type of insurance is typically suited to financial advisors, management consultants, accountants, lawyers and health professionals.

Public Liability insurance^ is designed to help provide protection for you and your business in the event a customer, supplier or a member of the public are injured or sustain property damage as a result of your negligent business activities. For example, if a customer slips and falls on your premises.

Some businesses could benefit from both professional indemnity insurance and public liability insurance. For example, an allied health professional might receive a claim against them for an injury that happened during treatment or allegations of negligence from that same client if they tripped over a towel left on the floor while leaving the treatment room.

Compare Public Liability Insurance with iSelect in partnership with BizCover

At iSelect we've partnered with BizCover to help you find a good deal on your Public Liability Insurance! Compare online, or call us today on 13 19 20.

^As with any insurance, cover is subject to the terms, conditions and exclusions contained in your policy document. The information contained on this webpage is general only and should not be relied upon as advice.

Last updated: 27/08/2020