Most owners first meet business public liability insurance as a line in a contract, a lease or a tender: "evidence of public liability cover required". This guide is for Australian small and larger businesses working out where their own activities create exposure, how package policies fit, and how to set a policy up so it matches the business you actually run. For the basic definition, start with our national guide.
Quick answer
Business public liability insurance covers claims by people outside your business for injury or property damage. It is not compulsory for every business, and it sits beside, not in place of, workers compensation and professional indemnity.
Business Public Liability Insurance in Australia at a Glance
| Question | Short answer |
|---|---|
| What does it cover? | Injury, death or property damage to a third party because of your negligence |
| Who is the third party? | Customers, suppliers, visitors and members of the public |
| Does it cover employees? | No. Employers need workers compensation |
| Does it cover professional advice? | No. That is professional indemnity |
| Is it compulsory? | Not for every business. Some states need it for certain occupations |
| Can I buy it in a package? | Many insurers offer packages for business types |
Where Your Business Creates Public Liability Exposure
Rather than guess by industry, look at how your business works. The question each time is whether someone outside the business could be hurt, or their property damaged, because of what you do.
| Situation | Why it matters |
|---|---|
| Customers or suppliers visit your premises | Business Queensland gives the example of a visitor injured by sharp edges on machinery |
| You work at someone else's site | You can damage their property or injure someone there |
| You sell food or goods | business.gov.au gives food making a customer sick as an example |
| You work from home | Home insurance may not cover business activity, while public liability can cover injured visitors |
| You supply councils or large clients | Tenders state the type and level of cover |
| Your occupation is licensed | Some licences set a minimum, such as for Queensland electrical contractors |
Picture a small cafe that also caters off site. The premises create one set of exposures (a customer slipping inside) and the catering creates another (a guest harmed by food at an event). A policy written only for the premises may not describe the catering at all. The aim is for the business description to match every place you trade.
Public liability does not solve every risk, and our national guide maps the gaps to other covers.
Package Policies and Common Business Covers
business.gov.au says to ask insurers whether they offer packages tailored to your business type, and that a package can be cheaper than taking out separate policies. A lower package price is only a saving if the contents are right, so compare what it includes, not the headline figure.
The NSW Small Business Commissioner fact sheet gives a quick guide to which common covers you may need:
| Cover | Needed? |
|---|---|
| Workers compensation | Yes if you have employees |
| Motor vehicle third party | Yes if you have motor vehicles |
| Public liability | Maybe |
| Product liability | Maybe |
| Professional indemnity | Maybe, if you give professional advice, designs, specifications or project management |
The fact sheet suggests building your answer from questions about the business. Do you give specialist advice? Do you employ staff or rely on contractors? Do customers come to you, or do you work at their premises? Do you trade from premises, online or both? Do legislation, industry bodies or your lease set requirements? The product disclosure statement shows what each policy actually says.
Limits, Contracts and Licences
The right limit is usually set by your contracts and your risk. The fact sheet says you normally need a minimum level of public liability or professional indemnity cover and may decide you need more, and that councils set the level after a risk assessment. A licence can set a floor too. Queensland electrical contractors, for example, must hold at least $5,000,000 of public liability as a licence condition, according to a guide dated March 2021 that you should re-check.
Business Queensland says claims can fail where a business is insufficiently insured. Before you request quotes, find out what your largest client contract demands, and whether the limit applies per claim or across the policy period.
Setting Up the Policy in the Right Business Name
A policy names an insured entity, and a certificate of currency confirms the entity covered, the type of cover and that the policy is active on a given date. If you operate as a company, partnership or sole trader, the name on the policy should match the entity on your licence or contract. The Electrical Safety Office, for example, requires the policy to be in the name of the legal entity applying for the licence.
Getting the name wrong is a paperwork error that can look like a cover problem. If you work for yourself, read our sole trader guide.
Telling Your Insurer About Changes in Your Business
Under section 21 of the Insurance Contracts Act 1984, you must tell the insurer every matter you know is relevant to its decision before the contract is entered into, including matters a reasonable person in your position would know are relevant. That duty makes your first description of the business important. Describe your activities fully, and ask your insurer or broker what to do when you start a new line of work, hire staff or take on a new site. Our quotes guide explains the duty in full.
Steps to Arrange Business Public Liability Insurance
- List what the business does and where it does it.
- Check which contracts, licences or leases set a minimum limit.
- Decide whether you also need product liability or other covers.
- Ask for quotes using the same details each time.
- Compare limit, excess, exclusions and wording using our compare guide.
- Ask for a certificate of currency once you buy, and review the policy each year and whenever your activities change.
Cost, Duty and Complaints
We do not publish a typical price. Brokers commonly cite the type and size of the business, the industry, the limit and claims history as price factors, and insurance duty varies by state. In NSW, a CGT small business can claim an exemption on product and public liability insurance, while Queensland lists a 9 per cent general insurance rate. Our cost guide has the detail.
If something goes wrong, the Australian Financial Complaints Authority defines a small business as one with fewer than 100 employees. It says it cannot consider cover for legal liability, including public liability and products liability, in a small business insurance product. It can consider other covers, such as fire and business interruption, and a broker's conduct in arranging a policy.
Where to Go Next on Cairn Cover
The one thing to remember: describe the whole business, then match the policy to that description. Read the public liability insurance guide for Australia, then check state rules in the Queensland guide. Our Australia hub lists every Australian guide.
Frequently Asked Questions
What is business public liability insurance? It is cover for claims by third parties for injury or property damage linked to your business activities, where you were negligent.
Do all businesses need it? Not by law. Some states need it for certain occupations, and clients or landlords can require it.
Does it cover my staff? No. Employers with employees need workers compensation.
What is the difference between a package and a single policy? A package bundles several covers for a business type. business.gov.au says it can be cheaper, so compare the contents and not only the price.
Which limit should my business hold? We do not give personal advice. Your contracts, licence or lease usually set the minimum, and a broker can help you decide beyond that.
How does Cairn Cover help? We explain how cover works, link dated sources on the words they support and connect the checklists. We do not sell insurance, quote prices or recommend products.