Businesses searching for public liability insurance NSW often find advice written for other states. New South Wales (NSW) has its own picture: council tenders that set cover levels, a state duty exemption for small businesses and its own civil liability law. This guide covers those NSW specifics, using official sources we checked on 29 October 2026, and sends you to our national guide for the basics.
Quick answer
The NSW Small Business Commissioner marks public liability as cover you may need, not a legal must. Small businesses that pass the CGT small business test can claim an exemption from NSW insurance duty on it.
Public Liability Insurance NSW at a Glance
| Question | Short answer |
|---|---|
| Compulsory for every business? | The NSW fact sheet marks it "maybe", depending on your business |
| What sets the negligence rules? | The Civil Liability Act 2002 (NSW) |
| Is there a duty exemption? | Yes, for CGT small businesses, on product and public liability insurance |
| What is the turnover test? | Aggregated turnover below $2 million for the previous year and likely below $2 million for the current year |
| Can AFCA settle a dispute about it? | AFCA says it cannot consider public liability for small business insurance |
Is Public Liability Insurance Compulsory in New South Wales?
The NSW Small Business Commissioner fact sheet sorts common covers into required and maybe. Workers compensation is required by law if you have employees, and motor vehicle third party cover is required if you have motor vehicles. Public liability is marked "maybe", as are product liability and professional indemnity, depending on what you do. The fact sheet describes public liability as essential protection against the financial risk of third party death, injury or property loss or damage.
Two cautions apply. The fact sheet is undated and excludes construction related procurement, and it tells you to check legislation, industry body rules and lease terms for your occupation. Confirm with your licensing body and your broker before you rely on "maybe".
Council Contracts and Tenders
If you supply goods or services to a council, the fact sheet says the insurance requirements are usually spelled out:
| Topic | What it says |
|---|---|
| Type and level of cover | Tenders are normally very specific about both |
| Proof of cover | You may need to submit certificates of currency |
| Who decides the level | The council, after a risk assessment of complexity, value and risk |
| Example by size | A small business may be adequately covered with $5 million, while a larger business with more substantial risks may need $10 million to $20 million |
| Capping liability | You may seek to limit liability to a set sum or a value linked to the contract |
Treat the dollar figures as the fact sheet's example, not a rule. Your tender documents set the real requirement, so ask for the required limit in writing before you request quotes.
NSW Small Business Insurance Duty Exemption
Insurance duty is a state tax on premiums. Revenue NSW says the insurer is liable to pay it and it is usually passed on to the insured person. If the insured is a CGT small business, the exemption covers product and public liability insurance, along with commercial vehicle, commercial aviation and occupational indemnity insurance.
| Point | Detail from Revenue NSW |
|---|---|
| Who qualifies | A business with aggregated turnover below $2 million for the previous income year and likely below that for the current year |
| What counts as turnover | Australia wide turnover, plus affiliates and connected entities |
| How to claim | Give your insurer a small business declaration in an approved form |
| How long it lasts | A financial year, so give it again at each renewal |
| Who can sign | Only the insured person. Agents and brokers cannot complete it |
| Packages | The insurer apportions the premium so duty is not charged on exempt parts |
| Refunds | Entitled if duty was charged on exempt cover issued or renewed after 1 January 2018 |
| Penalty | A maximum of $11,000 for false or misleading information |
The Revenue NSW page was last modified on 12 December 2024. The signing rule is the one people trip over, because it means a broker cannot tick the box for you. If you are unsure whether you qualify, ask your tax adviser.
The Civil Liability Act 2002 and NSW Claims
The Civil Liability Act 2002 (NSW) defines negligence as a failure to exercise reasonable care and skill, and its Part 1A includes a Division on duty of care. Those ideas sit behind many public liability claims. We do not explain the Act in detail, so speak to a lawyer about a specific claim.
Questions to Ask Before Buying Public Liability Insurance NSW
- Does my tender, lease or licence set a minimum limit?
- Will I need certificates of currency, and how quickly can I get one?
- Am I a CGT small business, and will I give my insurer a declaration?
- Do the exclusions match my activities and where I work?
- Does the policy name the right legal entity?
The fact sheet also suggests starting from your risks: whether you give advice, employ staff or rely on contractors, work at your premises or the customer's, and trade online or on site. Your answers decide whether public liability is enough alone. Our business guide shows how the covers fit together.
Where to Go Next on Cairn Cover
The one thing to remember: the exemption is yours to claim, not automatic. Read our national guide, see how Queensland differs in the Queensland guide, and prepare with the quotes guide. The Australia hub lists every Australian guide.
Frequently Asked Questions
Do NSW businesses have to hold public liability insurance? The NSW fact sheet marks it "maybe", depending on your business. Tenders, leases and licences can require it.
Does the NSW duty exemption apply automatically? No. You make a small business declaration to your insurer, and only the insured person can sign it.
What if I was charged duty I did not need to pay? Revenue NSW says you are entitled to a refund for exempt cover issued or renewed after 1 January 2018. Ask your insurer.
Can I ask the NSW tender for a lower limit? The fact sheet says the council sets the level after a risk assessment and that you may seek to cap liability. The tender documents decide what is possible.