How much Public Liability Insurance do I need?

When considering how much Public Liability insurance your business may need you should consider the level of risk your business faces, as well as other factors like industry and contractual requirements.

It would be nice to have a crystal ball to know exactly how much cover you should have, but the amount of Public Liability cover you choose is ultimately up to you. Choosing a higher level of cover will be pricier, but it may bring you greater peace of mind to know that you are covered for more situations. On the other hand, you may weigh up the risks and decide that paying a lower monthly or yearly premium is a better decision for you.

Many business contracts will include a minimum amount of Public Liability insurance to be in place –stipulating the amount of Public Liability insurance you are required to have to comply with the terms of the contract. This may apply to builders, contractors working in shopping centers, electrical contractors, and government contractors.

Likewise, many industry associations and professional bodies also require members to obtain and maintain a minimum amount of Public Liability insurance for membership or to meet licensing requirements. This could affect personal trainers, massage therapists, or XXX.

It is important that you take the time to consider the scale of work that you do and the level of financial protection you will need in the event a public liability claim is made against you. In other words, what is the highest amount that you think a claim against you could cost? This amount could then be your level of cover. Your level of cover will also be influenced by which industry you are in, and the typical risks that businesses in your industry face. The location of your business premises may also be a factor you would like to consider.

Fortunately, with BizCover, there are three levels of cover (limits of liability) available: $5 million, $10 million or $20 million. You can choose the level of cover that best suits your business needs and satisfies your contractual and industry requirements.

Below is an overview of what is typically covered (and not covered) under a Public Liability insurance policy:

What is typically included?*

• Claims for compensation due to personal injury suffered by a third party (e.g. a customer, supplier or member of the public)
• Claims for compensation due to damage to property owned by a third party due to your negligent business activities; and
• Legal and defence costs associated with a covered claim

What is typically not covered?*

• Injuries to your employees
• Damage to your own property
• Costs of rectifying faulty workmanship
• Professional negligence
• Contractual liability
• Events occurring before or after the policy period

Many public liability policies also provide cover for product liability. Product liability provides protection in relation to claims by third parties due to personal injury or property damage caused by products sold or supplied by your business. Reasonable costs incurred in defending a covered claim will also be met.