Public liability insurance is a critical safeguard for businesses and property owners, protecting them against claims made by members of the public who suffer injury or death on their premises or in connection with their operations.
What is Public Liability Insurance?
This type of insurance indemnifies the policyholder against claims made by a person other than an employee, on the policyholder’s premises or in connection with the policyholder’s business which causes personal injury or death.
Public liability insurance usually covers legal liability for third-party injury and property damage. Product liability and professional indemnity address risks from products and professional services, subject to the policy.
Key Points
Policy Features Vary: Most providers offer wide-ranging cover according to whatever injury compensation laws apply at the place where the injury occurs.
Australia-Wide Cover: It is important that your policy provides Australia wide cover for off-site events rather than insurance limited to a particular location or site.
New Locations: The carrying on of business at new locations (e.g. the opening of additional premises) creates additional risks for which additional or extended insurance is required.
Public liability insurance of a different type is also included in homeowners’ insurance.
Who Needs Public Liability Insurance?
Public liability cover is important for all businesses that have customers or suppliers visit. Organisations that offer events or off-site activities which are open to the members of the public should also ensure they have public liability insurance.
Public liability insurance is also essential for all owners of the property, including homes.
Home-Based Businesses or Employees
Technology has made it easier for people to work at home. If you run a business from home you need to obtain this cover as such risk may not be covered under your home insurance which, although it includes public liability, is generally restricted to the public liability of a domestic kind.
For businesses who have employees working from home, it is important that the insurer is notified of the relevant particulars so they can assess any additional risk that results from such an arrangement.
Employees
This insurance is not a replacement for Work Cover / Workers Compensation which protects staff or people you have hired on work placements. If you hold Work Cover, your public liability policy may also respond to protect you for additional common law liability beyond Work Cover expenses claimed by sub-contractors if this has been declared to the insurer.
Public Liability Compared to Professional Indemnity or Product Liability Insurances
These other types of insurance indemnify the business against injury or property losses resulting from the goods or services supplied by the business.
Product Liability Insurance
Businesses that sell or manufacture products should obtain products liability insurance. This covers damages to their customers and others due to dangerous or defective products. Not just manufacturers but also restaurants, bars and retailers (with some exceptions), should investigate the need for products liability insurance.
Professional Indemnity Insurance
Trades or professional services businesses should obtain professional indemnity insurance to cover claims by their customers.
Professional indemnity insurance is crucial for professionals such as accountants, consultants, marketing companies, real estate agents, digital agencies, architects, business analysts and software developers. Tradesmen such as carpenters, electricians and plumbers should also carry this type of indemnity.
Public Liability Policy Comparison
Public liability quotes and features differ from one provider to another. When comparing quotes, you need to look at more than just the premium and the deductible. The conditions and extent of cover can vary greatly. A suitable deductible (or ‘excess’) can often be negotiated in return for lower or higher premiums.
Important
Occupation-Specific Restrictions: Depending on your occupation or business, certain policies will often have restrictions or requirements for cover. For example, if you are in earthmoving, it is standard to expect the policy to include a ‘dial before you dig’ type endorsement.
Onerous Requirements: Some policies include very onerous requirements that could make the cover, in practical terms, useless for your particular purposes.
Check carefully to make sure you are protecting your business by getting appropriate cover.
Frequently Asked Questions
Does public liability insurance cover property damage?
Yes. Public liability insurance usually covers legal liability for damage to other people’s property, subject to the policy.
Is public liability insurance the same as workers compensation?
No, public liability insurance is not a replacement for Work Cover / Workers Compensation which protects staff or people you have hired on work placements.
Do I need public liability insurance if I work from home?
Yes, if you run a business from home you need to obtain this cover as such risk may not be covered under your home insurance which is generally restricted to the public liability of a domestic kind.
What is the difference between public liability and professional indemnity insurance?
Public liability usually covers third-party injury and property damage arising from business operations. Professional indemnity covers liability arising from professional advice or services; product liability covers defective-product risks.
Public liability insurance is a fundamental protection for any business or property owner who interacts with the public. Carefully review your policy to ensure it provides appropriate cover for your specific circumstances, and seek professional advice if you are uncertain about your insurance needs.