Do I need public liability insurance?
If you’re a business owner, sole trader, or contractor, public liability insurance can be essential. Whether it’s suitable for you, depends on your industry, occupation and other factors.
What is public liability insurance?
Public liability insurance covers you and your staff for legal and other associated costs, as well as other expenses if, while you’re running your business, a third party gets injured or their property is damaged:
- on your premises,
- because of your products (for e.g. undercooked food),
- or negligence.
For example, if a customer slips at your property or a contractor hurts their back lifting your boxes on the job.
What are business owners accountable for?
In Australia, you’re responsible for financial damages, legal costs and other charges if personal injury or property damage is caused to another person due to actions associated with the operation of your business. Third parties include:
- suppliers and
- any member of the public – who isn’t an employee – who comes into contact with your business.
Without adequate coverage, legal bills and compensation for such claims could make your business come to a grinding halt. Even everyday slip-and-fall accidents can leave your business thousands of dollars out of pocket.
Is public liability insurance mandatory?
It all depends on your occupation and where you live – for example, it’s mandatory if you’re a plumber in Victoria or an electrician in Queensland. If you’re unsure, read up on the requirements of your state via your relevant government website.
Even if public liability insurance isn’t a legal requirement for you, it can help businesses in many industries. No matter how well executed your business plan is, you can never entirely erase some element of risk.
Who can benefit from public liability insurance
Public liability insurance may be especially handy if you own a café, takeaway shop, or restaurant. With so many people coming and going, accidents are bound to happen.
Luckily, AAMI Public Liability Insurance can cover you against claims from third parties who:
- Trip down steps at your premises.
- Fall ill from coffee accidentally made with spoiled milk.
- Injure themselves delivering supplies.
- Get injured due to staff negligence – for example, if a customer slips because of a puddle your staff forgot to mop up.
Did you know that public liability claims are the most common claim for tradies?
It comes as no surprise, as tradies regularly deal with clients in their homes.
With AAMI Public Liability Insurance, we’ll help cover the cost of damages if your business is responsible for personal injury to a third party or damage to their property. For example, if you smash a lamp in a client’s home on the job, or someone trips on tools you accidentally left on the ground.
Other public-facing businesses
Any business that deals with clients, customers, subcontractors, or sole traders, either directly or indirectly, should consider public liability insurance.
It’s also useful if you operate in public spaces, spaces owned by others, you manufacture products, or you have visitors on your premises.
Here are some other types of businesses that can benefit from public liability insurance:
This is by no means a conclusive list. Many businesses would benefit from public liability insurance. If you’re not sure if this insurance is suitable for you, feel free to contact us to discuss your options.
Do I need public liability insurance as a sole trader?
As long as you have customers or suppliers visiting – no matter how infrequently – public liability insurance can be important.
The risk of someone injuring themselves on your property can be very serious. But luckily, public liability insurance can help cover the compensation and legal costs. It’ll also cover accidents in your home, if you're running a business from your home, making it suitable for home-based businesses like e-commerce stores, massage therapies and consultancies.
Do I need public liability insurance as a landlord?
As a landlord, you’re responsible for claims made by tenants as well as other people who are injured on your property – and your liability exposure often begins during the open house.
AAMI Public Liability Insurance covers you up to $20 mil in legal liability for an accident at your rental property which you are legally liable for. So, you’re covered if, for example, a branch unexpectedly falls and injures your tenant, or they trip and fall on an old staircase.
What if you rent on Airbnb?
Airbnb typically comes with a kind of host liability insurance – though, the level of coverage may be limited.
AAMI’s Public Liability Insurance covers you for injuries and property damage sustained by guests, co-hosts, cleaners, and others on your property.
But you’ll need to inform us before you start hosting.
AAMI Business Insurance is the trusted insurer of more than 70,000 businesses in Australia – and there’s a reason why.
Here are some of the things you may be covered for with our Public Liability Insurance:
- Legal costs in a liability claim.
- Cover for others acting on behalf of your business when the incident occurred.
- Loss or damage of a third party’s goods and property, while under your care or service.
- First aid expenses at the time of an incident.
- Third party injuries on your premises.
Are your employees covered?
Public liability generally covers claims against your business by members of the public, not your employees.
Workers compensation insurance will cover you for workers injured on the job. AAMI doesn’t offer workers compensation insurance, but you can get a quote from GIO.
What else is excluded under public liability insurance?
- Cyber-related incidents.
- Commercial motor vehicles.
- Professional indemnity insurance.
- Product recalls.
- Damage to your own property.
- How much does public liability insurance cost?
- Tools of the trade: Insurance for tradies
- What insurance should I get for my small business?
Insurance issued by AAI Limited ABN 48 005 297 807 trading as AAMI Business Insurance Read the Product Disclosure Statement before buying this insurance. The TMD is also available. Go to aami.com.au. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.