Public liability, product liability, and professional indemnity insurance – what does your small business need?
- Public liability insurance, product liability insurance, and professional indemnity insurance can be important for small businesses
- The cover you need will depend on your business type
- Identify the risks you face – and how to protect your business
When you run a small business, an unexpected cost can have a major impact – which is why it’s important to have insurance.
Public liability, product liability and professional indemnity insurance are all suitable for different businesses for different reasons – so what does your small business need?
Here’s an overview.
What is public liability insurance?
Public liability insurance covers you for compensation claims from third parties who have been injured, or whose property has been damaged in connection with your business.
Examples of public liability claims
If a customer slips and injures themselves while on your premises, public liability insurance could cover you for subsequent claims. These could include medical bills, compensation bills or legal fees.
Or let’s say a tradie working in someone’s house caused damage to the property. Public liability insurance could cover the costs of repairs, as well as legal fees.
Is public liability insurance the same as business liability insurance?
Yes, some insurers – including QBE – refer to public liability insurance as business liability insurance. QBE’s Small Business Insurance automatically comes with business liability as your base.
Who needs public liability insurance?
Any business that deals directly with the public – or works in third-party premises – might want to consider public liability insurance.
Cafés, restaurants, bars, retail stores, gyms, and tradies are among the businesses and occupations that may need public liability insurance. It could cover you for compensation claims if a third party is injured or has property damage, as a result of your business operations, not caused by your products.
Related article: Public liability insurance guide for small business
What is product liability insurance?
Product liability insurance covers you for injury or property damage caused by the use or consumption of products.
Examples of product liability insurance
Perhaps a toy shop sells a product that’s a choking hazard for children. Product liability could cover legal fees and claims if a child was injured.
Or a bakery sells contaminated pastries and customers become sick. Product liability insurance could protect against associated claims.
Who needs product liability insurance?
Any business that makes, sells, distributes, repairs, services or treats physical products a customer has taken possession of. This could include retailers, cafe owners and manufacturers, which should have product liability cover.
What is professional indemnity insurance?
Professional indemnity insurance is liability cover for professionals who offer their services or advice. It covers claims for any alleged negligence, mistake or breach of duty that arises from providing those services. It can cover the cost of claims, as well as legal expenses.
Examples of professional indemnity claims
Examples of professional indemnity claims include claims against a financial adviser for providing advice that resulted in a financial loss. Or an architect that makes structural errors in a building design that leads to construction defects.
Is professional indemnity insurance the same as professional liability insurance?
Yes, some insurers refer to professional indemnity insurance as professional liability insurance.
Who needs professional indemnity insurance?
Professional services businesses such as accountants and consultants may need professional indemnity insurance to cover them against any claims that arise from the services they provide.
Related article: Insurance for professionals – everything you need for small business
Does QBE offer professional indemnity insurance?
QBE Professional Indemnity insurance is only available through our broker network. Check out our guide to finding a broker if you don’t have one.
You can also find an insurer through the Insurance Council of Australia.