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Why does a hospitality business need liability insurance?

26 February 2021

Explore Public Liability Insurance 

Why does a hospitality business need liability insurance?

If you’re in hospo, whether your business is big or small, public interaction is at the core of what you do — and thatcan carry a certain type of risk. Here’s why liability insurance can be important for your business.

What is public liability insurance?

If someone is injured or their property is damaged while they’re visiting your business, Public Liability Insurance can provide cover for:

  • legal costs
  • medical expenses and damages
  • the expenses incurred by giving first aid to others, and
  • compensation for any damaged or destroyed customer property. 

How to identify the risks

As a hospitality professional you’ll have:

  • evaluated the particular risks of your operation and the premises it’s located in
  • come up with a plan to deal with foreseeable incidents, and
  • trained your staff for events where things might go wrong.

However, with so many customers and staff coming and going, the risks of accidents such as trips and falls can still be uncomfortably high, considering the potential significant consequences.

But, the right public liability insurance can give you the peace of mind you need to successfully run a very busy hospitality operation, so that becoming too popular won't be something you have to worry about.

Get a quote today

Slips, trips, and falls

[body] A large number of these injuries are caused by customers slipping on wet floors, often after closing time, when the staff were cleaning up for the day. The customers did not realise the restaurant was closed and have slipped on the wet floor as they entered. To avoid this happening, always ensure you have put up warning signs, even when you’re closed.

Foreign objects in food

[body] These claims normally arise when the object causes an injury to a customer, such as damage to their teeth. Many claims have been caused by a wide range of unusual objects. AAMI has received claims where metal screws, pieces of perspex, metal shavings or fragments of wood have managed to find their way into foods. Olive pips or seeds left in dips or sauces have also caused dental damage claims.

Food contamination

[body] Food poisoning claims are also reasonably common, particularly when they involve home-made products. AAMI has received many food poisoning claims caused by foods involving raw eggs, such as home-made custards and mayonnaises, or cured meats, such as salami. 

Collapsing umbrellas and flying signs

While these are not as common, AAMI has also received many claims caused by an unsecured marquee, umbrella or ‘A-frame’ sign hitting an injuring a customer, or damaging their property.

Hot spills

AAMI has also received its fair share of claims where employees have accidently spilt hot food or drinks on a customer, causing harm.

Read more:

Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Read the Product Disclosure Statement before buying this insurance.


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.