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What Legal Requirements Apply to Public Liability Insurance

What Legal Requirements Apply to Public Liability Insurance
What Legal Requirements Apply to Public Liability Insurance

Interacting with other people is the best part of the workday – for most people at least! From builders to baristas, tradies to tour guides, recruiters to road haulage operators, nearly every imaginable job involves connecting with people outside the company. The trouble is, if something goes wrong and a person outside your business suffers an injury, or their property sustains damage, these connections quickly sour.Public liability insurance provides financial cover in these unfortunate situations. If you own a business that interacts with customers, the general public, patrons or passers-by, carrying public liability insurance is smart. But is it a legal requirement?We’re going to answer that question and more to help you confidently assess public liability insurance quotes.

In brief: What is public liability insurance

Public liability insurance protects you and your business from the financial fallout of an accident involving a third party.Legal costs. Medical bills. Rehabilitation. Repairing damaged vehicles or equipment. When you or a company representative is found negligent, the costs stack up quickly, adding to the emotional burden.

What public liability does (and doesn’t) cover

Public liability insurance varies between companies. But in general, it will cover:

  • Third-party medical bills, including rehabilitation
  • Damage, destruction or property loss for the third party
  • Legal costs
  • Damage to your property or materials
  • Further damages stemming from the actions of someone working on your behalf

It’s important to point out that public liability insurance primarily covers third-party costs. It is not a substitute for worker’s compensation insurance or business insurance, and it won’t cover asbestos-related claims, substandard work or damage to your own product.See the complete list of inclusions and exclusions here.

What is product liability insurance?

Product liability insurance, often taken out together with public liability insurance, covers you for products your company design, installs, manufactures or sells. This includes delayed legal costs and damages. Product liability insurance protects you from potential financial ruin if you are held liable within the statute of limitations.

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Is public liability insurance a legal requirement in Australia?

No, public liability insurance is not legally required in Australia. That might come as a surprise, given the risks of not carrying public liability insurance. Of course, this only refers to the statutory requirements – the State and Federal requirements for undertaking a business. However, you may find it a condition of the partners, suppliers, contractors and customers you do business with.For example, contractors are well within their rights to refuse a job if your company can’t provide a public liability insurance certificate. Similarly, seasonal employees may turn down a job if the workplace isn’t covered. Again, this is because there is a very real risk they end up out of pocket after an accident.And for many Australians, that simply isn’t good enough. So let’s look closer at the reasons you should seek a public liability insurance quote ASAP.

Why you should carry public liability insurance


The number 1 reason Australian businesses take out public liability insurance is financial security. Our policies cover third-party costs up to $20 million, which far outweighs the modest premiums in our insurance quotes.Can you really afford to foot the medical, legal, rehabilitation and damage repair costs if you are held liable? We understand that small businesses need to manage costs, which is why we tailor insurance quotes. However, the cost of not having insurance doesn’t bear thinking about.

Peace of mind

Running a business involves a lot of moving parts. The last thing you need is to wake up in the middle of the night wondering if a contractor, driver or employee has accidentally caused damage or injury.

Unforeseen and unexpected accidents

Accidents are, by their very nature, unintentional. But you or a company representative can still be held responsible, especially if a court deems your behaviour to be negligent. Even if you choose to settle, public liability insurance covers the cost. Damages can also arise from unexpected places. For example, our policies automatically cover injuries occurring because of advertising, which is not something business owners tend to think about insuring.

Litigation costs

Thankfully, Australia is less litigious than the USA. However, people can – and do – still take companies to court for damages and injuries, usually because there is a lingering impact after an accident. You should thoroughly check the public liability quote and PDS to determine the limits of your insurance relating to ongoing or delayed legal defence and settlement costs.

Risk management

Risk varies significantly between industries – even between individual contractors within an industry. A mine haulage company faces different risks from an engineering firm, for example. Weighing up the potential costs (human, financial, productivity, reputational…the list is long) against the mitigating factors helps you decide whether a task is worth undertaking. In those instances, seeking a public liability insurance quote can be a reasonably simple undertaking to mitigate significant cost. As a result, your contractors and suppliers will feel better about doing business with you, and you lower your company’s financial risk by up to $20 million.

Don't let accidents put a dent in your plans. Shield your business with a free public liability insurance quote today.

Comparing public liability insurance quotes

No two companies are identical. The same goes for public liability insurance quotes. You may notice the quoted premium varies between insurance providers, which will no doubt raise questions.

Why insurance quotes can vary

Let’s lift the lid on the insurance industry for a minute. You might be comparing two, three or ten different public liability insurance quotes and wondering why the premiums vary so much. This has to do with unique risk factors and coverage limitations.Individual insurance policies should suit your requirements, not provide blanket cover at a high cost. For example, a road transport company is exposed to different risks than a recruiter. Those two policies will vary based on data from each industry, such as:

  • Accident frequency
  • Litigation costs and lengths
  • Injury or damage severity
  • Equipment involved

You might also be tempted by the cheapest premium, but that can leave you exposed due to limitations in the policy. Check the PDS thoroughly before signing on the dotted line. Or, better yet, contact Connect Business Insurance, an Australian public liability insurance expert. Our team will tailor a quote to suit your business, explaining the coverage in detail, so you know exactly what to expect.

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