Compare public liability insurance policies

In business – as in life – the unexpected can happen. A simple oversight could land your business in hot financial water if someone gets hurt as a result of your negligence. That’s when public liability insurance can be a sensible investment for business owners.

What is public liability insurance?

Public liability insurance is a type of cover that offers financial protection for a person, business or contractor if their negligence results in the death or injury of a person, loss or damage to a property, or an economic loss. According to Understand Insurance – the consumer information arm of the Insurance Council of Australia, public liability insurance is becoming more popular. As a result, it may automatically be included in some property insurance policies, such as your home building insurance.

In general though, public liability insurance can be most relevant to businesses. You may find public liability insurance is included in some business insurance packages. Alternatively, it can often be purchased as a stand-alone policy. Where public liability is included as part of a broader package of liability insurances, Understand Insurance says it is important to check how much public liability protection is in place, and consider whether this is sufficient for your business.

Compare public liability insurance

The table below compares a selection of public liability insurance policies available in the market. We have selected the products which have information publicly available to be included in the table. The information about the public liability insurance policies in the table is as at the 26th of April 2022. We will not be actively updating the table so not all products may be available and features may have changed. Please note that products have been sorted alphabetically, A to Z, by brand name.

While best endeavours have been made to reflect accurate information, this information should not be solely relied upon. For further details, Canstar suggests getting in touch with the provider, accessing the information available on their website and consulting professional advisers as required. Always read the product disclosure statement and consider whether the product makes sense for your financial circumstances. Canstar does not rate public liability insurance policies and makes no recommendation about comparative features and benefits with respect to these products.

Source: Canstar. Last updated 26 April 2022.

What does public liability insurance cover?

Exactly what is covered by public liability insurance can vary between insurance providers and policies. This makes it important to read the Product Disclosure Statement (PDS) of any policy you’re thinking of buying, to understand what you are – and are not – covered for. Broadly speaking, business insurance provider BizCover notes that public liability insurance typically covers three main areas. These include: (1) personal injury suffered by a third party, (2) damage to property owned by a third party, (3) legal and defence costs.

1. Personal injury suffered by a third party

Chances are your business engages with people – be they customers, clients, suppliers and/or members of the public. Something as simple as a customer slipping on a recently mopped floor could lead to a legal claim for injuries if you are found to be negligent.

2. Damage to property owned by a third party

Even with the highest level of care, accidents can happen that could see your business subject to a legal claim for damages. A plumber, for example, could unintentionally cut through electrical wiring, causing damage to a customer’s home.

3. Legal and defence costs

Defending negligence claims can be costly, especially if the claim process drags out or if you are required to do battle in court. Public liability insurance can protect your business from significant legal fees.

There can be exclusions that public liability insurance won’t normally protect against. This includes known hazardous activities or criminal actions. In addition, public liability insurance won’t usually protect you or your employees if you are hurt or injured at work.

Why might I need public liability insurance?

Depending on the industry you operate in, and where your business is located, having public liability insurance can be a legal requirement. In Victoria, for example, electrical contractors are required to have at least $5 million of public liability cover in place, according to Energy Safe Victoria. That said, no business owner can predict with pinpoint accuracy if their venture could be sued for negligence, and if it happens the costs can potentially be very high. This is why Understand Insurance recommends that all businesses take out public liability insurance.

Running a business without public liability insurance can leave you exposed to the risk of being sued. A 2020 Insurance Inquiry Report by the Australian Small Business and Family Enterprise (ASBFE) Ombudsman pointed to the “unpredictable nature of civil liability damages and Australia’s increasing litigation culture”, adding that “When a slip or fall can cost a small business millions, operating without public liability insurance is not an option.”

What’s the difference between public liability insurance and professional indemnity?

While public liability insurance covers you if your business is found to contribute to a third party death, injury or property damages, professional indemnity cover works a little differently. It protects you from legal action if someone experiences a loss by following your professional advice, or as a result of the services you offer.

Let’s say, for instance, that you run a fruit shop, and a customer slips on a grape left lying on a tiled floor and breaks their arm. The customer sues you for damages. In this situation, public liability insurance is relevant to handle the costs of the claim.

Alternatively, we’ll assume you run a busy legal practice. You provide advice to a client which they follow, but it turns out your advice is wrong, and as a result the client loses money. If the client sues your practice to try and claw back their loss, professional indemnity cover may kick in to help you manage the costs.

In certain professions it is a legal requirement to have professional indemnity insurance in place. For example, as a guide, the Australian Health Practitioner Regulation Agency (Ahpra) says health practitioners who undertake any form of practice in their respective fields in Australia are typically required to have professional indemnity insurance.

Is public liability insurance mandatory?

Having the right insurance in place for your business can be an essential part of running a successful enterprise. Public liability insurance is mandatory in certain states, for some trades in particular. Or it may be mandatory if you are running a business at an event. As a guide, the Business.gov.au portal explains if you are running a market stall, the market organisers may require you to have public liability insurance.

Even where public insurance is not mandatory, it may be worth having this type of cover. Business.gov.au explains public liability insurance could offer a financial lifeline across a variety of situations. This could include if your business:

• serves food that makes a customer unwell
• is responsible for the emotional distress of a customer
• causes property damage, such as a fire.

None of us know what lies around the corner, and in a busy enterprise mistakes and oversights can happen. If something goes wrong, it could result in legal action being taken against you. In these types of circumstances, public liability insurance may help you manage expenses – including significant costs that could otherwise have the potential to put you out of business.

This content has been written by Nicola Field and reviewed by our Sub Editor Jacqueline Belesky as part of our fact-checking process. Content last updated on 22 July 2022.