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The Problem With Cheap Public Liability Insurance

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When finding public liability insurance policies, there is a trap that the insurers don’t tell you, when they offer you a cheap premium.

There are some obvious advantages of going with the cheapest insurance: you’ll save money in the short term, and while saving money is a strong draw for most people, insurance helps protect you financially over the long term and allows you to recover from a major disaster. It’s what the insurers don’t tell you that may result in your carrying the risk when choosing a cheap policy.

“Not all public liability insurance policies are the same, insurers are obliged to tell you what they cover – not what they have left out. Insurer’s wording may include reduced cover option or simply no cover for common claim scenarios”

There are potential disadvantages of choosing the cheapest insurance policies, including:

  • Less coverage
  • Higher Excess
  • Lower claims assistance and broker support
  • Rates more likely to increase at renewal

Before choosing an insurance policy, you should understand what’s covered and what isn’t.

Less coverage

Do you know exactly what you’re covered for? In the event that you need to make a claim, will it be rejected because you didn’t read the fine print of your policy? If you look after a customer’s goods, it is common for insurers to exclude Care Custody and Control extension, some insurers may describe this as goods in physical and legal control. Care Custody and Control exclusion commonly applies to occupations such couriers, transport companies, mechanics and even pay TV installers

Higher Excess

It’s when a claim happens that you truly appreciate the value of a public liability policy, however, some insurers will have a high excess for different claim scenarios. Check prior to purchasing the policy, the excess, and compare other insurers to see if it is a common excess.

Lower claims assistance and broker support

What’s the point of insurance if it steals your peace of mind rather than gives you peace of mind? Customers are in very safe hands when it comes to Ausure brokers policies, we have a dedicated claims team and over 20 years of insurer relationships.

“Cheap” insurances often come with poor claims ratings, long claim settlement times, and little to no support, essentially you become another cog in the machine. While working with a broker may cost a fraction more to start with, come claim, it means less stress for you as you can hand things over to the professionals.

An Ausure broker has the industry knowledge and connections to ensure that you get the right level of cover to protect your business at a competitive price.

Public Liability Insurance Rates more likely to increase at renewal

To get you in the door, or on the books, budget insurers will often offer lower rates for a new business. The cheap policy is often only cheap for the introductory period and then at renewal, your rate increases substantially. You may also find, that no claims discounts are not offered on cheaper policies, and because the policy has less broker support, it is highly unlikely you will be able to negotiate with your insurer for a better value premium.

While we are currently seeing increases in premiums as a result of significant events that have occurred over the last 12 – 18 months. EG, 2019/20 bush fire season, 2021 storms and the current COVID-19 situation is also creating a lot of uncertainty across the globe and not just locally here in Australia. All types of policies are being affected, from personal to all styles of business policies regardless of the claims that have been made

When you get your public liability quote, you will be asked what level of cover you require. Cover generally offered is either $5, 10, or $20 million. $5 Million will normally be the cheapest, however, there is often a marginal difference between $5 and $10 Million dollars cover, and often, $5 million may not be enough to satisfy a government or business tender process

Expanded article from :

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Public Liability Insurance, What’s Not Covered?

What doesn’t public liability insurance cover

Public liability insurance does a great job of protecting your business against injury claims, loss or damage claims made by a third party as a result of your negligence, and with most policies that will extend to cover your products (if Broadford or Product Liability is included) However, there are several common business scenarios where the policy will not cover you.

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Faulty workmanship

Property damage claims make up a large percentage of public liability claims, but where that damage is caused by your faulty workmanship, it’s likely to be declined. Some insurers will offer this as an extension to cover for some trades but speak to your broker if you feel that this is a large exposure for your business.

Injury or damage to you or your property

If you as the business owner sole trader or worker are injured as a result of your negligence, your public liability insurance will not respond, this also goes for loss or damage to your property the policy will only cover loss to a third party.
There are a number of income protection, personal accident, or workers compensation options to protect you and your workers, and general property cover may cover for loss or damage to your property, your broker can assist with assessing your risk.

Loss or damage as a result of your professional advice

Doctors, lawyers and even plumbers can cause financial loss as a result of the professional advice they give, this loss is generally excluded in most public liability policies and you or your business may need to consider professional indemnity insurance.

Australian Business Insurance

Damage or injury as a result of motor vehicle claims

Most registered vehicles, car insurance, truck insurance will include some form of third party liability cover, however, your businesses public liability policy will not cover damage or injury as a result of motor vehicle claims.

Still not sure if it’s covered?

Speak to our brokers about the risks your business face, have a claim scenario? Avoid having your claim declined by an insurer by speaking to our brokers first, as you will need to declare the declined claim every time you apply for insurance and may result in that insurance being refused.

General Advice Warning

Please note that any advice given has been provided without taking into account your objectives, financial situation or needs. It is also based on information we have obtained from you. You must ensure the information is accurate and complete. Otherwise, this advice may be based on the inaccurate or incomplete information. You should consider whether the advice is appropriate in light of your objectives, financial situation, and needs

Does Public Liability Cover Faulty Workmanship?

Does Public Liability Cover Faulty Workmanship?

Public liability insurance protects you and your business against the financial risk of being found liable for negligence. This may be for property damage or personal injury to a third party. However if that loss is the result of faulty workmanship it may result in your claim being declined.

Insurers Wording

One insurers wording excludes claims “for the cost of performing, completing, correcting or improving any work undertaken by You.”

Some insurers do offer Faulty Workmanship Insurance, and others also will allow you to add as an extra to your business insurance or public liability policy.

Still unsure, speak to a specialist, get them to review your potential risks and possible mitigation.

Is Public Liability Insurance Compulsory in Australia?

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Is Public Liability Insurance Compulsory in Australia?

Is Public Liability Insurance Compulsory in Australia?

Public Liability Insurance is not required by law

Public liability insurance is not mandatory by law for all businesses in Australia. However, certain industries and activities may require public liability insurance as a condition of licensing or as a contractual requirement. The requirement for public liability insurance can vary depending on the state or territory, industry regulations, and specific business activities.

For example, in some cases, contractors working on government projects or events may be required to have public liability insurance. Similarly, businesses operating in specific industries such as construction, hospitality, or childcare may be obligated to have public liability coverage to obtain certain licenses or meet industry standards.

Even if public liability insurance is not legally mandated for a particular business, it is still highly recommended. Public liability insurance provides financial protection against claims made by third parties for bodily injury or property damage arising from a business’s operations, products, or premises. It helps cover legal costs, compensation payments, and related expenses, which can be substantial in the event of a claim.

Having public liability insurance can help protect a business’s financial stability and reputation in the event of an accident or incident involving third parties. It is essential for businesses to assess their specific risks and consider obtaining public liability insurance coverage, even if it is not legally required for their industry or location. Consulting with an insurance professional or broker can provide guidance on the appropriate coverage based on the business’s needs and activities.


Public Liability Carpenters

Public liability insurance may be compulsory for your occupations license

Public Liability Insurance may be compulsory for your occupations license, such as builders, plumbers and electricians in some states, check with your industries licencing authority in your state.

Public liability insurance may be required to enter a work site or third party premises

You may be asked to show a Public Liability Insurance policy before entering a work site or third party premises including offices. Federal and State government departments,  local governments and a hospital will almost certainly request proof of insurance prior to work commencing, and that will not be restricted to trades it can also include consultants and visiting professionals.

If you need more information about your Public Liability needs, call the team. is brought to you by Insure 247 to assist Australian business compare Public Liability Insurance quotes from leading Australian Business Insurers :

Your Quotes will come from specialist licensed to act on your behalf to find you a number of options with leading Australian insurers

If you are still unsure, talk to our team on 1300 046 787, to discuss your requirement.

Public and Products Liability Insurance Quotes

Please note that any advice given has been provided without taking into account your objectives, financial situation or needs. It is also based on information we have obtained from you. You must ensure the information is accurate and complete. Otherwise, this advice may be based on the inaccurate or incomplete information. You should consider whether the advice is appropriate in light of your objectives, financial situation, and needs by Insure 247 Ausure Insurance Brokers Pty Ltd T/as Insure 247 Authorised Representative of Ausure Pty Ltd AFSL 238433. 
General Advice Warning: Please be aware that any advice that may have been given or implied is general advice only. We have not taken into consideration your individual needs, objectives or financial requirements. Before deciding to purchase a financial product, you should consider the appropriate Product Disclosure Statement to ensure the product is suitable for your needs.