Do I need Public Liability Insurance cover?

Public Liability insurance is a great option for New Zealand small businesses. It protects you and your business against the financial implications if you are found liable for loss or damage to other people’s property, or cause illness or injury that is not covered by the Accident Compensation Commission (ACC).

Public Liability insurance protects you from the costs associated with accidents and mishaps of all kinds. Even if you run a tight ship, and have stringent safety protocol in place, accidents can and do happen. This insurance product provides peace of mind to all entrepreneurs, small business owners, and sole traders, from professionals and tradesmen to retailers and other types of small businesses.

Is Public Liability insurance a legal requirement?

Public Liability Insurance is not a legal requirement in New Zealand for most small businesses. However, there are some situations where it is mandated before you can legally operate. A minimum level of Public Liability insurance may be required by a company you worth with, a client you work for, or a certifying body. It might even be a government requirement, depending on your profession. Even though it’s not required by law for most businesses, all small businesses should consider holding Public Liability insurance to protect them against personal injury caused to a third-party or damage to their property. No matter how careful you may be, if your business interacts with clients, suppliers or even members of the public there is the potential for a claim to occur, which could cost your business thousands of dollars in legal fees and compensation
Consider getting cover if one or more of the following apply to your business:

• You have customers, suppliers or members of the public who visit your business premises, e.g. diners who visit your restaurant, or clients who visit your office, whether in a commercial building or home-based office
• You manufacture and/or sell any kind of products, e.g. food, beauty products, furniture, clothing or household items
• Working at your client’s site, e.g. a tradesperson carrying out repairs or work in other people’s homes
• If your business hosts public events, like a stand at a trade-show attended by members of the general public

It’s important to take the time to consider the potential costs your business would incur should a Public Liability claim occur.

Did you know?

Public Liability insurance is generally a mandatory requirement for some trades when you operate under a state issued license, for example builders, plumbers or electricians. Depending on the state or territory you work in and your occupation there are special requirements for your cover. For example, it is a legal requirement in Queensland for electricians to hold the Consumer Protection extension with a minimum level of $50,000 cover in order to obtain an electrical contractor’s licence.

It may also be a requirement under a government or private client contract, or as part of a lease agreement for renting a commercial property.
Do I need Public Liability Insurance if I have a home-based business?

Running your business from home can bring a whole host of benefits like flexible working hours and not having to battle with peak hour traffic and public transport, but just because you are enjoying these unique benefits does not mean that you are protected from the kind of circumstances that could cause a Public Liability claim.

While you may automatically assume that everything will be covered under your home and contents insurance, this is not often the case when it comes to operating a home-based business. If you think you are covered under your home insurance policy, be sure to check your Product Disclosure Statement, as most home insurance policies do not cover any liability arising from the operation of a business.
If your business has any interaction with clients, suppliers or any other third-party, or you sell any form of products, Public Liability insurance is a small price to pay for big peace of mind. It is better to be safe than sorry. Paying a relatively small amount for Public Liability insurance every month or year is much cheaper than the average cost of a public Liability claim.