Public Liability Insurance In New South Wales

Part of doing business is interacting with your customers, suppliers and the public, whether they’re visiting your place of business or using your products or services. Small business owners have a responsibility to take reasonable steps to ensure the safety of their customers, suppliers and community as well as for their property.

Public Liability Insurance is designed to 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.

Be sure to check the policy wording and/or Product Disclosure Statement of any policy you consider for specific details of policy inclusions, limits and exclusions.

What is public liability insurance?

Public liability insurance is designed to protect your business in case you’re found liable to a third party for injury or property damage they sustain due to negligence in the operation of your business*. In order for you to be found negligent, a claimant will need to prove¹:

1. You owed them a duty of care
2. You have breached that duty of care, and
3. They have sustained compensable harm caused by that breach

What does public liability insurance cover in NSW?

If you’ve been found to have acted negligently in the operation of your business, public liability insurance will help protect you from damages claimed by a third party for the harm caused as well as related expenses, including²:

• Death or injury (bodily or psychiatric) resulting from your goods and services or from an avoidable risk associated with your premises
• Damage to a third party’s property
• Legal costs awarded to the third party
• Your reasonable legal costs incurred in defending the claim

Is public liability insurance compulsory in NSW?

Insurance requirements vary from industry to industry and business to business. There is no specific statutory requirement for business to hold public liability insurance in New South Wales, however some industries may require it to obtain a license.

For example, generally most landlords require you to hold this insurance to take out a lease, and some organisations may also require you to hold current public liability insurance to partake in a contract.

In any event, most small to medium size businesses take out public liability insurance to protect them should they be at fault in the course of their business activities, causing harm to a person or damage to their property. You may consider purchasing public liability insurance if:

• The general public visit your place of business – including, customers, delivery people and tradespeople
• You conduct business off-site and interact with the general public
• You sell products consumed by the general public (product liability cover is typically available under a public liability policy)

Which cover is suitable for your business?

When making the decision on which cover is appropriate for you, it’s imperative to consider the full breadth of your business, any associated entities, and the points that you have contact with customers or any other member of the public.

For instance, a business involved in heavy industry may require more extensive cover than a business operating primarily in an office environment. Similarly, a business providing a high risk product (like insecticides) may need more comprehensive cover than a Bondi café selling coffee.

The exact scope of the protection you might need should only be decided after careful consideration of the risks faced by your company.

Who needs public liability insurance?

Public liability can be an important pillar of your company’s risk management policy. Your requirement for public liability insurance will ultimately depend on the nature of your business. However, public liability cover is taken out by businesses in industries such as³:

• Accommodation and food services: hotels, motels, restaurants, pubs and cafes
• Administrative and support services: employment services, cleaners, gardeners, and pest control
• Arts and recreation services: live performances, sporting events, gyms, casinos, zoos, national parks
• Manufacturing: food, drinks, textiles, clothing, chemicals
• Retail and wholesale trade: electrical goods, food and grocery, fuel, furniture and homewares

As you can see a wide range of businesses and industries choose to purchase public liability insurance to protect themselves from the risks associated with doing business day-to-day.

Get covered for public liability with iSelect and BizCover

After reading this article you should have an understanding of what public liability insurance is, how it works, and how it can protect your business. Equipped with this knowledge, all you need to do is find a public liability policy for your business.

With iSelect, in partnership with BizCover, you can compare business insurance policies online, or if you prefer, call 13 19 20.

*Please note that all insurance is subject to the terms and conditions set out in the policy wording or Product Disclosure Statement. The information set out above is general only and should not be relied upon as advice.

Sources:
1. https://www.business.gov.au/Risk-management/Insurance/Business-insurance/
2. https://www.legislation.nsw.gov.au/#/view/act/2002/22/
3. https://www.business.gov.au/Planning/Templates-and-tools/Industry-factsheets/