Public Liability Insurance in NSW

How does Public Liability work in NSW? 

Picture this: you’ve waited all your life to open your very own organic supermarket on Bondi’s main drag. Your first customer comes in, a jar of artisan honey falls off a shelf, and that first customer suffers a broken toe. 

Unfortunately, accidents can happen. Fortunately, Public Liability insurance could help protect you financially when they do. 

Consider Public Liability insurance a financial safeguard. It can offer protection if a member of the public suffers an injury or property damage as a result of your negligent business activities. They could be on your premises, like in the case of the wayward honey jar, or using your goods and services at home. 

In NSW, Public Liability claims come under the Civil Liability Act 2002 (NSW), which governs how claims for damages due to personal injury and some types of economic loss are handled.  

How will Public Liability insurance protect my business? 

Public Liability claims can be nothing if not expensive. And when you’re already forking out thousands on your new business, a costly accident is probably the last thing you need. 

Public Liability insurance could cover you and your business for: 

• Third-party injury. If a member of the public gets injured or suffers psychological damage, you could be up for medical expenses, compensation for their lost income, or a lump sum payment
• Third-party property damage. Depending on how nasty the damage is, you might have to pay to repair or replace their property
• Legal costs. If the matter ends up in court, you could be facing all kinds of expenses, from lawyer fees to court admin 

Helpful tip from BizCover

Public Liability cover offers specific to third-party claims. However, your employees are covered by Workers’ Compensation – which is mandatory for all NSW employers. Depending on the kind of business structure you have, you might fall under Workers’ Compensation or you may want to consider getting a separate Personal Accident & Illness policy if you are a sole trader.

Jane Mason

Head of Product, Channels & Risk at BizCover

Is Public Liability insurance compulsory in NSW? 

In NSW, insurance requirements can vary from industry to industry and business to business. As far as Public Liability insurance is concerned, businesses in NSW aren’t obligated to hold it. But there may be a few instances where it’s needed to obtain a license. 

For example, if your business is renting out commercial premises (like a retail store, hairdressing salon or acupuncture clinic), your landlord may require it before they can give you a lease. 

You might also need it before signing a job contract with an organisation, if you’re hosting an event in public (including in the City of Sydney area) or if you’ve got a public-facing construction site. 

Which businesses need Public Liability insurance in NSW? 

Loads of NSW businesses could benefit from Public Liability insurance, such as: 

• Restaurants and cafes
• Bars, pubs, RSLs and casinos
• Entertainment and live music venues
• Hotels, motels and resorts
• Tourism operators and tour guides
• Retail stores, food shops and supermarkets
• Event planning businesses
• Construction companies and tradies
• Contractors and freelancers who work in external offices
• Cleaners and gardeners
• Healthcare providers
• Beauty and hairdressing clinics
• Fitness studios and gyms
• Real estate agents 

In a nutshell, many businesses take out Public Liability insurance to protect themselves against injury or property damage claims from members of the public.  

You might want to consider it, too, if: 

• The general public (think customers, clients, delivery people, tradespeople and so on) visit your place of business – including if you operate your business from home 
• You conduct business off-site and interact with the general public – for example, if you’re visiting offices or clients’ homes 
• You sell products consumed by the general public (Product Liability cover is typically available under a Public Liability policy) 

How much does Public Liability insurance cost in NSW? 

There’s no single answer to this one. What a cafe in the centre of Sydney might be paying in premiums could be completely different to a brewery in the Southern Highlands. 

When they’re calculating your premiums, insurance providers consider several factors, such as: 

• Your business size. Smaller businesses typically pay less than larger ones – simply because they’ve got lower exposure to potential claims 
• Your business type. Some industries are just riskier than others. For instance, a company that takes travellers on adventure caving tours through the Jenolan Caves might pay more than one doing tours of the QVB 
• Your location. Insurance providers generally consider where in NSW your business is located. They’ll look at the claims history in your area and may adjust your premiums accordingly. The NSW Government also applies a stamp duty to insurance policies, including Public Liability Insurance. If you’re an eligible small business, you may be able to get a stamp duty exemption 
• Your policy. There are so many options to choose from when you’re taking out Public Liability Insurance, and a lot of them are fairly customisable. You can go for different coverage limits, excess amounts, features, add-ons, exclusions and more. All of these can affect how much you pay 

What should I consider for my Public Liability insurance? 

To ensure you get the right policy for your business, there are a few things to think about: These include: 

• The coverage limit. This refers to the highest amount your insurer will pay if someone makes a claim. It’s important because it reduces your chances of facing a hefty bill
• Policy exclusions. Check what’s not covered so you don’t come up against any unpleasant surprises
• Premiums. While you obviously want your policy to be cost-effective, you don’t want to get caught out with inadequate protection. Ensure you go for a balance of cost and coverage

Where can I find and compare Public Liability policies? 

If you’re keen to take out Public Liability insurance for your business, you can compare policies from leading providers with iSelect, in partnership with BizCover.