Public liability insurance is a critical safeguard for businesses operating in Australia. It protects against financial risks arising from claims made by third parties for personal injury, property damage, or other liabilities connected to business activities.
This article is written by our contract lawyers with experience in insurance. We explore the key aspects of public liability insurance, its benefits, and why it is essential for businesses of all sizes and industries.
Public liability insurance is a type of business insurance designed to protect companies from financial losses resulting from claims made by third parties. These claims may arise due to personal injury, property damage, or other liabilities caused by the business’s operations or premises.
Accidents can happen at any time, even in the most cautious environments. Whether it’s a customer slipping on a wet floor or a contractor accidentally damaging a client’s property, public liability insurance ensures that businesses are financially protected against such unforeseen events.
Covers claims made by third parties who sustain injuries due to the business’s operations or on its premises. For example:
Protects against claims for damage caused to third-party property. Examples include:
Some policies extend to cover advertising-related claims, such as:
Public liability insurance often includes coverage for legal fees incurred in defending claims, regardless of the outcome.
Covers immediate first aid costs at the time of an incident.
While public liability insurance provides broad protection, there are exclusions that businesses should be aware of:
Exclusions | Examples |
Asbestos-related claims | Claims arising from asbestos exposure |
Aircraft products | Liability for products used in aircraft |
Product recalls | Costs associated with recalling defective products |
Gradual pollution | Environmental damage occurring over time |
Employer’s responsibility for workers | Covered under workers’ compensation |
Punitive damages | Damages awarded as punishment for egregious conduct |
Deliberate acts | Intentional acts causing injury or damage |
Unlawful activities | Claims arising from illegal business activities |
Additionally, high-risk activities such as working on large construction projects, marine vessels, or in hazardous locations like mines may require specialised coverage.
Construction businesses face higher risks of physical injury and property damage. As a result, they often require higher coverage limits and may pay higher premiums.
Retailers and hospitality businesses must protect against injuries to customers and damage to third-party property on their premises.
Commercial leases will often require tenants to hold public liability insurance.
A failure to professional services in accordance with the standard of care may not be covered by public liability insurance.
Businesses should work with an insurance broker and determine whether it is necessary to hold professional indemnity insurance. Unlike general liability insurance, professional indemnity insurance covers businesses where they provide negligent advice or services.
Identify the specific risks associated with your industry and operations
Carefully examine coverage limits, exclusions, and optional extensions
Ensure the policy covers all regions where your business operates
For high-risk industries, consider working with underwriting agencies that offer tailored policies
Public liability insurance protects businesses from financial losses arising from claims made by third parties for personal injury, property damage, or advertising liability connected to business activities.
While not legally required for all businesses, certain industries and trades must have public liability insurance to obtain licences or secure contracts.
Premiums are influenced by factors such as industry risks, coverage limits, geographic scope, and the business’s claims history.
Yes, most policies include coverage for legal defence costs incurred in defending claims, regardless of the outcome.
with your Key considerations include coverage limits, exclusions, optional extensions, and whether the policy aligns business’s specific risks and operational needs.
Public liability insurance is an essential investment for Australian businesses to safeguard against unforeseen liabilities and ensure operational continuity. By understanding your business’s unique risks and selecting the right policy, you can protect your financial stability and reputation while demonstrating a commitment to safety and responsibility.
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