How much does Public Liability Insurance cost for restaurants and cafes?
A public liability claim is every restaurant or café owner’s worst nightmare. The high risk of injury and illnesses occurring makes Public Liability insurance an important form of cover for any business operating within the hospitality industry. But just how much does it cost?
It comes down to a number of key factors, including:
- The type and nature of your hospitality business. For example, is it licensed? Does it provide take-away food?
- Your business turnover and size.
- The amount of insurance cover you require.
- We analysed NSW BizCover policies sold during the 2021-2022 financial year to obtain some average figures around the cost of Public Liability insurance for restaurant and café businesses.
We understand that sometimes you just want a quick idea of how much your insurance is actually going to cost. However, it’s important to note that the data included within this article was sourced in July 2022 and is intended as a guide only. It may not reflect pricing for your particular business as individual underwriting criteria will apply.
What is the average premium for Public Liability insurance?
On average, in 2021/22 restaurant and cafe owners in NSW could expect to pay a premium of around $74 per month for Public Liability insurance.
*Data based on NSW BizCover customers
How does revenue affect the premium?
One method insurers use to determine the size of the risk associated with your business is the amount of revenue your business turns over each year. A higher turnover provides an indication that you are operating a busy restaurant or café, potentially serving hundreds of customers food and beverages each day. This can present a higher risk than a less busy venture.
Does the size of my business affect the premium?
When asking how much Public Liability insurance costs for a restaurant or café, you’ll need to factor in the number of people you employ. Generally, more employees indicate a larger business and a higher risk involved. Employees can make mistakes at work leading to third party personal injury or property damage.
Looking at NSW BizCover customers in 2021/22, a business with only one employee could expect to pay around $43 per month for Public Liability insurance, however, employing five people will increase the premium to around $72 per month.
*Data based on NSW BizCover customers
Does the level of cover affect the premium?
Generally, yes. But the cost of Public Liability insurance does not increase at the same rate as the level of cover. For example, in 2021/22 in NSW, taking out $20 million worth of Public Liability cover would cost around $77 per month. However, reducing the level of cover by half, to $10 million, reduced the premium to about $66 per month.
The amount of cover that businesses in the hospitality industry select is usually influenced by a number of things, such as the type of risks your business is exposed to, the size of the business, as well as any requirements set by the commercial lease agreement for the premises.
Average monthly cost of Public Liability Insurance by level of cover
| Coverage level | Average monthly premium* |
|---|---|
| $5 Million | $50 |
| $10 Million | $66 |
| $20 Million | $77 |
*Data based on NSW BizCover customers
