Public Liability Insurance

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A Guide to Public & Product Liability Insurance in Australia

Public Liability Insurance: In the event of an accident or unforeseen incident resulting in harm or damage to someone outside of your employees, your business may be held legally responsible for the associated costs. Public liability insurance provides a safeguard against the financial risks associated with liability claims, allowing you to operate your business with confidence.

Product Liability Insurance: Although your company may have strict measures in place, errors can occur. For instance, a product you sell or manufacture might cause harm to a customer, even if it's not your fault. In such cases, you may face severe financial consequences due to legal and court expenses if the customer decides to sue you. To mitigate such risks, product liability insurance is available to protect your business against lawsuits that arise if a product you supply, sell, or assemble causes harm to a person or property.

Who Should Consider Public & Product Liability Insurance?

Although public and product liability insurance is not mandatory for most businesses, it is advisable for all companies to consider it. This is because accidents can happen unexpectedly, and the costs associated with a lawsuit can be significant.


"Public liability insurance helps protect you and your business against the financial risk of being liable for negligence.”

—— Australian Government,

  • Business Owners: Any business that interacts with customers, clients, suppliers, or members of the public should consider public liability insurance. This includes retail stores, restaurants, hotels, contractors, manufacturers, event organizers, and service providers. It protects them against claims for bodily injury or property damage caused to third parties due to their business operations.

  • Self-Employed Professionals: Professionals who offer their services directly to clients, such as consultants, freelancers, architects, accountants, and lawyers, should consider public liability insurance. It can provide coverage if a client or member of the public suffers harm or property damage as a result of their professional activities.

  • Tradespeople and Contractors: Builders, plumbers, electricians, carpenters, and other tradespeople who work on clients' properties should have public liability insurance. Accidental damage to property or injury to third parties could occur during their work, and having insurance can protect them from potential legal and financial liabilities.

  • Event Organizers: Those responsible for organizing events, whether they are small local gatherings, conferences, exhibitions, or concerts, should consider public liability insurance. It can cover them if attendees or participants are injured or if there is property damage during the event.

  • Property Owners and Landlords: Property owners and landlords should consider public liability insurance for their premises. If a visitor or tenant is injured or their property is damaged due to negligence or unsafe conditions on the property, public liability insurance can provide coverage.

  • Non-Profit Organizations and Community Groups: Non-profit organizations, charities, and community groups that hold events or engage with the public should consider public liability insurance. It can protect them from claims arising from accidents or injuries that occur during their activities.

Why do people need Public Liability Insurance?

  • Protection against legal claims: Public liability insurance provides coverage for legal liabilities arising from third-party bodily injury, property damage, or personal injury resulting from your activities. If someone files a claim against you or your business for such damages, the insurance policy can help cover the costs of legal defense and any settlements or judgments that may arise.

  • Financial security: Without public liability insurance, you would be personally responsible for paying any damages or legal expenses resulting from a claim against you. Depending on the severity of the claim, this could lead to significant financial strain or even bankruptcy. Having insurance ensures that you have financial protection and can mitigate the risk of a substantial financial loss.

  • Compliance with contractual obligations: Many contracts and agreements, especially those with clients, customers, or business partners, often require you to have public liability insurance. It is commonly seen in industries like construction, events management, and hospitality. By having the necessary insurance coverage, you can meet these contractual obligations and continue to do business with confidence.

  • Professional credibility and trust: Having public liability insurance can enhance your professional credibility and reputation. It demonstrates that you take responsibility for your actions and have measures in place to protect others from potential harm. This can be particularly important for businesses as it instills trust in customers, clients, and partners, potentially leading to increased business opportunities.

  • Peace of mind: Accidents and unexpected incidents can happen despite taking precautions. Public liability insurance provides peace of mind, knowing that you have financial protection in case of an unforeseen event. This allows you to focus on your work or business without constant worry about potential liabilities and their financial consequences.

What Does Public & Product Liability Insurance Cover?

Public and product liability insurance is designed to protect businesses from legal liability to third parties, such as clients, customers, and the general public, in the event of injury or damage caused by their business or products. It can also cover emotional distress or shock caused by your business. The policy typically covers the costs of investigating, defending, and settling claims, as well as any compensation payment you may be found legally liable to pay. Some of the specific areas that public and products liability insurance can cover include: 

  • Personal injury: if someone is injured due to your actions or products, the insurance can cover your liability to pay damages to the injured party.

  • Property damage: if the property is damaged as a result of your actions or products, the insurance can cover your liability to pay damages to the affected party.

  • Advertising injury: liability arising from advertising done by or on behalf of your business.

What Is Typically Excluded From Coverage?

Typically, the following are not covered by most insurance policies due to exclusions, excess requirements, or liability limits set by the insurer: 

The cost of fixing faulty workmanship

Damage to your own product

Claims made by employees

Claims related to the use of a registered motor vehicle

Claims related to asbestos.

Our insurance broker can provide you with additional information on any other exclusions that may apply.

What is the difference between Public Liability and product liability insurance cover?

All SC Brokers Business Insurance products have a combined Public and Products Liability cover. Both Public and Products Liability provide coverage for third-party injury or property damage that you might cause. The difference is that Public Liability relates to injury to a person or damage to a person’s property that you cause whilst you’re on the job, and product liability relates to injury to a person or damage to their property caused by any products you distribute, supply or manufacture.

How much public liability insurance do I need?

Every business is different, and there is no ‘one size fits all’ rule for how much public liability insurance your business needs. Sometimes the amount of public liability insurance you need will be dictated by the contracts you work on – for example, some corporate and government contracts will stipulate a minimum amount of public liability.

Public liability claims can be very costly, so it’s important you choose a level of cover that will financially protect your business should you need to make a claim.

What isn’t covered by Public and Products Liability Insurance?

There are a few scenarios not covered by Public and Products Liability Insurance, including:

  • Injury to any employees you might have (this can be covered via Workers Compensation Insurance), 

  • Civil legal liability incurred as a result of your professional advice (this can be covered via Professional Indemnity),

  • Pollution,

  • Asbestos, and

  • Product recall.

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