What is Public Liability Insurance?

Public Liability insurance is designed to provide protection for you and your business in the event a customer, supplier or a member of the public brings a claim against you due to them being injured or sustaining property damage as a result of your negligent business activities.

Small business owners have a legal responsibility to take reasonable steps for the safety of their customers, suppliers and the community and for their property.  

Most Public Liability policies also extend to cover Product Liability. If you sell, supply or deliver goods, even in the form of repair or service, you may need cover for negligence claims against you where your product has caused injury, death or damage.  

Even the most careful businesses run the risk of injuring someone or damaging something during the course of their operations.  

Chances are like many other small businesses, if you were faced with a public liability claim, the financial impact of paying the claim and associated legal fees (including defence costs) could potentially send you out of business. That’s why you should consider Public Liability insurance to provide the financial protection your business deserves.  

What does Public Liability insurance typically cover?

Like most insurance policies, it is always important to check what you are exactly covered for. If you are ever unsure, refer to the Product Disclosure Statement (PDS) or chat with your insurer.

Personal injury suffered by a third party (e.g. a customer, supplier or member of the public)

If your business interacts with people on a regular basis, there is always going to be the chance of a potential claim occurring. Accidents can happen in the blink of an eye, from a client accidentally tripping over a box of stock in a retail store to a beauty professional using a product that causes a reaction to their clients skin. No matter how unintentional, the impact of a claim can have a big impact on your business, a worry you can do without.

Damage to property owned by a third party due to your negligent business activities

This covers things like accidentally causing damage to your clients personal property, like spilling food and damaging their clothing, mobile phone, etc. It may also provide protection for professions like tradies where physical works are been done at a clients property and things don’t go to plan, like accidentally bursting a pipe causing damage.

Legal and defence costs associated with a covered claim

Covers your legal expenses which may be involved with your claim, which can quickly add up, especially if your claim goes on over a lengthy period of time.

**Many public liability policies also provide cover for product liability.

Related: What does Public Liability insurance cover?

What does Public Liability insurance typically not cover?

• Personal injuries to you or your employees
• Damage to your own property
• Costs of rectifying faulty workmanship
• Professional negligence or unlawful activity
• Contractual liability
• Events occurring before or after the policy period
• Asbestos
• Advertising Injury
• Pollution
• Reckless or wilful failure to take care

What could a Public Liability claim result from?

There is plenty to think about when you run your own business, and the last thing you want to be worried about is the potential threat of a Public Liability claim. These are some examples of situations where a Public Liability claim may occur.

• Injury to or death of third parties as a result of your negligent business activities
• Damage to a third party’s property as a result of your negligent business activities
• Financial loss directly caused as a result of your negligence
• Inappropriate installation of equipment causing damage to property

If your business interacts with members of the public, clients or suppliers in any capacity, then there is always a risk a claim may arise. Let’s take a look at some industry specific examples of when a claim may occur.

Tradies – Trade businesses have the potential to cause damage to property when carrying out works, like accidentally spilling paint all over the carpet. This is where cover for rectification of faulty workmanship can assist.

Retail and Hospitality – Working closely with both customers and suppliers means slips, trips and falls are often risks that these types of businesses are faced with each day. When providing food services gets thrown into the mix, there is also a risk of things like claims for food poisoning to consider, something which the Product Liability section of your Public Liability policy could provide protection from.

Professionals – For many professionals, there are a variety of ways to interact with clients. Maybe you have a home office established where clients visit you, or you’re out visiting them at locations. Either way, Public Liability is still important to consider, especially if your client were to trip and injure themselves at your property or if you were to accidentally cause damage to their personal property.