Public Liability Insurance is one of the most common types of insurance for businesses in Australia. It provides peace of mind for all kinds of businesses from professional to trade to retail and other types of small businesses.

Broadly, public liability insurance covers loss or damage to property, injury or death and other negligent acts and it’s a policy that every Australian business owner should consider.

But is it a legal requirement? Let’s find out.

Legal requirement for Public Liability Insurance

You might be surprised to discover that, no, Public Liability Insurance is not compulsory in Australia, meaning it’s solely up to the business owner to make this crucial decision.

Most small to medium sized businesses make the right decision, and take out a policy to protect any damage caused to a person or their property. 

It is, however, a little different when it comes to the trade industry. Some trades may, in fact, have mandatory Public Liability Insurance requirements and find they can’t obtain their licences without proof of cover. Along with this, there may be clauses in contracts stipulating the need for Public Liability Insurance.

Why take out a Public Liability Insurance policy if it isn’t compulsory?

You may be wondering why on earth you should take out an insurance policy that isn’t compulsory.  

There are a few reasons, but here is the main one you should be able to resonate with: MONEY.

If someone had an accident on your premises and sued you for damages, could you afford to pay for the legal costs involved? Could you afford to pay for their surgery, unpaid sick leave and rehabilitation costs?  Probably not, and this is where Public Liability Insurance comes in.

What does Public Liability Insurance cover?

Providing you have the right policy in place, your insurance company will provide the funds to cover your legal costs and any compensation claims, leaving your business free of financial risk and you, a little less stressed.

If your business sells products, there is the option to extend your policy to cover Product Liability too. Meaning that if a claim is made against you where your product has caused injury, damage, or even death, the legal costs will be covered here too.

It can cover things such as:

  • Pain and Suffering;
  • Economic Loss;
  • Non-Economic Loss;
  • Loss of Future Income/Part Loss of Income;
  • Bereavement;
  • Medical rehabilitation; and
  • Living assistance.

It’s important to remember that Public Liability Insurance doesn’t cover your employees. This is what Workers Compensation Insurance is for.

Should my business take out Public Liability Insurance?

Whilst Public Liability Insurance isn’t compulsory (unless perhaps you’re a tradesperson), it’s an important insurance for protecting your business, so it makes sense to consider it for yours.

If one or more of the below apply to your business, then you should seriously consider getting cover, and soon:

  • You have customers, suppliers or members of the public who visit your business premises
  • You manufacture and/or sell any kind of products
  • You work at your client’s site, e.g. a tradesperson
  • Your business hosts public events, like a stand at a trade-show

Public liability claims can be extremely costly, so if you’re a business owner and don’t currently hold a policy, it’s important to speak to an insurance broker to find out whether you may need one.

Find out more about Public Liability Insurance and read some FAQs for business owners here.

Grace insurance is here to find out more about you and your business and advise you on which type of insurance you may need for yours. In addition, we can provide you with an obligation free quotation on these insurances too.

Contact Grace Insurance in Joondalup, north of Perth today.