Public liability insurance guide for small business
- Public liability – also known as business liability – insurance can cover you for causing injury or property damage arising out of running your business
- For many occupations, you may need public liability insurance to operate
- Understanding the potential risks you face is important, so you can choose an adequate level of cover
What is public liability insurance?
Essentially, public liability insurance covers your business, partners and employees for claims made by a member of the public, in the event of injury, death, or property damage.
What does public liability insurance cover?
Public liability insurance covers third-party death or injury through general negligence caused in connection with your business. This could include a person falling over and injuring themselves in your shop, or if you prepared and served food that made a customer sick.
It can also cover property damage. Let’s say you’re a carpenter working in a client’s home, and you accidentally knock your ladder into a TV and crack the screen.
How much public liability insurance cover do I need?
This depends on the business size and industry, as ultimately, these factors affect a company’s level of risk. That means you could choose anywhere from $5 million to $20 million, depending on your business needs.
Public liability insurance is included in some small business insurance policies. But it’s important to check your public liability cover is enough for your business needs, especially if it’s packaged with other insurance covers.
Being sued for negligence can be very costly, and the likelihood of it happening to your business is unpredictable.
Is public liability insurance compulsory in Australia?
In some states and territories, certain occupations and industries are required to have public liability insurance to operate.1
For example, to apply for an electrical contractor licence in Queensland, you must hold a minimum of $5 million public and product liability cover.2
Another scenario where you may need public liability insurance in Australia is if you’re hiring a public venue. In this case, the owner of the venue or the local council might require you to have a public liability policy to hire the space.3
Related article: Insurance for tradies – is your insurance up to the job?
What are some examples of public liability insurance claims?
Electrician’s oversight sees sparks fly
One of your electricians has just completed a job at a commercial property. Due to some electrical work he carried out, a spark went unnoticed and ended up causing a small electrical fire, setting the premises alight. Your business may be responsible for the property damage.
Customer slips on recently mopped floor
The floor of your clothing shop has just been mopped. It’s mainly dry, but a small area remains a slip hazard, and you don’t put out signs to warn people about it. When a customer visits, slips, and injures themselves, they could lodge a claim against you.
Diners suffer food poisoning
A group of customers who ate lunch at your café reported food poisoning. If it’s found that the food served was contaminated or not properly refrigerated, you could be liable for their medical bills and other associated costs.
QBE’s Small Business Insurance offers public liability (business liability) as standard. Ideal for tradies, café owners, retail stores and sole traders, you can pick and choose any extra covers to suit your business needs.
QBE Small Business Insurance Get a quote
1 Types of business insurance | business.gov.au
2 Electrical licensing eligibility guide – February 2023 | Electrical Safety Office | WorkSafe.qld.gov.au
3 Conditions of Hire – City Spaces Centres | City of Sydney