How Much Public Liability Insurance Does My Business Need?

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What is Public Liability Cover For?

You run the risk of facing a third-party claim for either personal injury or property damage if customers come to your place of business or if your workers go to clients’ locations.

How much public liability insurance does an Australian Business need?

Insurers often offer $5 million, $10 million, and $20 million dollar cover options in Australia. It depends depend on your occupation, risk exposure, and regulatory requirements, but it’s a necessary protection for ALL enterprises, including small firms, sole proprietorships, and corporate organisations, says Adam Sloan, broker at Ausure Insurance Brokers and owner of

Some insurers offer a $50 million policy; however, it is not a popular choice for the majority of small and medium-sized firms. Nevertheless, it’s crucial to keep in mind that if you do business with local, federal governments or international contracts which may demand this greater level of coverage.

Public liability comparison

Public Liability Insurance is not required by law

The Australian Government explains* that although it is not needed by law to have public liability insurance, “If you own a business, you may be liable for damages or injuries to another person or their property.” Although liability insurance is typically optional, it is generally advised for firms in all industries due to the unpredictable and possibly very expensive nature of lawsuits. Your business and you are covered by public liability insurance from the financial danger of being held accountable for negligence. Negligence is defined as “damage that is reasonably foreseeable.”

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The different levels of coverage, wordings, exclusions, and inclusions that insurers offer will depend on the risk and the occupations that they prefer. Throughout the year, some insurers will run promotions. Additionally, if you have a long history with an insurer and have never filed a claim, you should think about asking for a discount. (However, unlike home insurance, they don’t provide claims bonuses.).

If you are still unsure speak to a broker or talk to our team on 07 5631 6040, to discuss your requirement.


The Problem With Cheap Public Liability Insurance

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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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.

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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.

Do I Need Public and Products Liability Insurance After I Cease Trading?

When your business ceases to trade, what insurance should be maintained?

Remember just because a business closes and/or ceases to trade, it does not mean it’s exposure to risk also ends.

The business and directors and shareholders may still have a liability exposure in relation to products sold, serviced, repaired, installed, imported or manufactured.

Public and Products Liability insurance policies are triggered by the occurrence of personal injury and/or property damage during the period of insurance. If you cancel the policy and a claim is made against you by a person who suffers personal injury and/or property damage after the date of cancellation of the policy, you will not be able to claim under the policy. It is irrelevant when the product was sold or the allegedly defective work was done.

In a recent claim, a kitchen manufacturer/installer installed a wall cabinet in 2013. In 2016, it fell from the wall damaging the cabinet as well as the kitchen benchtop it fell onto.

The insured had some months ago “closed” the business and their policies were cancelled. As a result, there was no cover in place when the damage occurred.

Although run-off cover is more commonly required for professional liability exposures, it’s not unusual for it to be contractually required for public and products liability risks.

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

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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