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Compare Public Liability Insurance

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Updated 22 April 2023

Summary of Public Liability Insurance

  • Public liability insurance covers claims for compensation from anyone not employed by your business who suffers an injury or who owns property that is damaged because of your business. 
  • A public insurance policy pays out on compensation claims, legal expenses and the cost of repairs.
  • Public liability insurance is not required by law if you run a business. However, the risks in operating a business make it popular among business owners.
  • The cost of each policy will be unique to what cover you want and a number of facts about your business, including the type of business, the industry, annual turnover, number of employees, size of the premises and the claim history.
  • There are a number of general exclusions with public liability insurance. The key word is 'public' - if an incident affects the public, it's usually covered. If an incident affects you or an employee, it probably isn't covered.
  • If you have an accident or incident, do not admit ANY blame or fault - if you do, your insurer may face challenges if and when they need to defend your case.

Get the right public liability insurance for your business with MoneyHub
Finding the right policy at the right price can be difficult - your business is unique, and so is its insurance needs. Risks to the public exist everywhere, and many are not obvious. Public liability insurance cover provides much-needed protection against unforeseen costs, such as compensation and legal fees. 

With the help of MoneyHub, you can understand what you need and select a policy that perfectly matches your business needs and risks, meaning you will only pay for the cover you need.

Our guide covers:
Advertising Disclosure: We may receive a commission if you take out a policy. Please compare the market widely to ensure the best value for your business.

Know This First: How much does public liability insurance cost?

The cost of each policy will be unique to what cover you want and a number of facts about your business, including:
  1. The type of business you run and the industry it operates in
  2. The annual turnover
  3. The number of employees (including subcontractors) 
  4. The size of the premises
  5. The claim history of the business

As a general rule, the greater the risk, the higher the premium. If you are a large building business working on many projects at once with a number of permanent and contracted staff, you'll pay more for public liability insurance than a home-based accounting firm. 

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​What is Public Liability Insurance?

Public liability insurance covers claims for compensation from anyone not employed by your business who suffers an injury or who owns property that is damaged because of your business. This could be something as simple as a visitor to your business slipping on a wet floor, resulting in a spinal injury and a claim for compensation. It can also cover more serious compensation claims, such as construction accidents.

A public liability policy will pay not only the compensation costs but also legal costs associated with any incidents. If your business has employees, contractors or representatives who come into contact with members of the public (either at their premises or yours), asking for a public liability insurance quote is a good idea.
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Examples of public liability claims:
  • You’re a builder working on a roof when your tools fall and tip down your customer’s spouting 
  • You‘re a restaurant, and a fire in the kitchen damages a neighbour's property
  • You’re a stylist, and a customer suffers scalp burns after you colour her hair

​What does public liability insurance cover?

A public insurance policy has three core components for covering claims:
  1. Compensation claims - if your business causes injuries or damage to a third party's person and/or property, public liability insurance covers the costs of the claim. The incident does not need to happen on your business premises - it can happen at a customer's place of business (i.e. during construction, delivery etc) or elsewhere (i.e. on a road).
  2. Legal expenses - if your business faces legal expenses defending a compensation claim, public liability insurance can cover the cost of lawyer fees. 
  3. Cost of repairs - a policy will pay for the costs incurred repairing the damage. For example, if you are an electrician and do something in the ordinary course of business that causes a fire, public liability insurance will pay for the repairs.

Does My Business Need to Buy Public Liability Insurance?

Public liability insurance is not required by law if you run a business. However, the risks in operating a business make it popular among business owners. In some professions, specifically construction and trade, it may be difficult to trade without it as clients will demand you have a policy in place.

A common situation will see a client stipulating that all bids for a construction project have 'up to ten million dollars of public liability insurance' or similar. Most government contracts also require businesses to have public liability cover.

Without public liability insurance, a business runs the risk of being liable for damages. A plumber causing a flood may end up being pursued for $10,000; a restaurant causing a fire which damages neighbouring properties could cost millions. Even small incidents and accidents could severely stress the finances of a business. Public liability insurance is all about protecting against an unknown risk - if the risk is too great, a policy can be a good idea.​

What Will Public Liability Insurance NOT Cover?

There are a number of general exclusions with public liability insurance. The key word is 'public' - if an incident affects the public, it's usually covered. If an incident affects you or an employee, it probably isn't covered (employers' liability or general business insurance may be more appropriate). 

General exclusions:
  • Any incident or accident that happens to you or an employee
  • Damage to your own property
  • Accidents that affect your employees and/or their possessions 

How can I compare public liability insurance policies?

Comparing policies not only saves money but also makes you aware of the range of cover available. Before you buy, it's essential to understand the levels of protection offered, the annual premium and what your excess is. If you are in doubt about anything, talk to a business insurance provider - they work with you to find the best policy to suit your situation. ​

Three Things to Know About Public Liability Insurance

Know the terms of your customer contracts to get the right insurance

Some customer contracts will specify a minimum level of public liability cover; reading and understanding the fine print means you can buy the right insurance. A higher cover limit may mean a higher premium, but not having sufficient cover could put you in breach of your contract.

Even if your clients don’t require cover, having a policy is attractive to other businesses looking for a supplier. By stating, for example, that your business is "insured up to $10 million for public liability", you could win favour over those who are not insured.

Safety records are a major factor in determining the cost of public liability insurance

By educating employees and contractors about workplace safety, taking precautions and generally operating your business with safety as the primary focus, the chance of making a claim will decrease. As your risk lowers, in time what you pay for a policy will drop too.

Most policies require an excess to be paid first

Your policy states what the excess will be, for example, $500, $750 etc. Business owners will claim for any incident where the cost is above the excess.

Before deciding on an excess amount, it's important to make sure your business could pay the excess without any financial difficulty or delay. 

Making a Claim on Public Liability Insurance

If you have had an incident or accident, claiming with your insurer is usually straightforward. It's a good idea to act FAST - if you are slow in claiming, your insurance cover may be compromised or negatively affected, so being prompt in notifying your insurer of an incident is essential. We outline the common steps policyholders take when making a claim: ​
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  1. Contact your insurer - explain your situation in detail as soon as you can; the insurer will be able to advise if you are covered and what to do next. If you are insured via an intermediary, contact them instead.
  2. Take action - it's critical to take every possible action to prevent a situation from getting worse; minimise the damage the best you can and call for medical assistance if it is needed.
  3. Do not admit ANY blame or fault - whatever has happened, it's essential that you don't admit any responsibility - if you do, your insurer may face challenges if and when they need to defend your case. 
  4. Don't respond directly to legal threats - if you are being pursued for compensation, forward all correspondence to your insurance company and lawyers
  5. Prevent the same incident from occurring again - organise a risk assessment, train staff in safety and security and seek consultation where necessary to lower the risk of any repeat incidents.

​If your claim is rejected, appeal and complain
  • Your insurer should inform you, in detail, why the claim was rejected and how it falls outside your policy. If you have 
  • If you disagree, jump on the phone and explain why your claim meets the T&Cs of the policy you bought.
  • If the insurer still refuses to cover your claim, ask your insurer for a "letter of deadlock". This letter lays out why the insurer disagrees with your claim. Once you have the letter of deadlock, you can access the Insurance & Financial Services Ombudsman Scheme which resolves disagreements between customers and their insurers.
  • Their free-of-charge service will make the final decision about your claim and order the insurer to pay out if they find in your favour. 
  • If your insurer isn't a member, you can complain to Financial Services Complaint Ltd who follows a similar process.​ ​​
​

Final Thoughts - Buying Public Liability Insurance Policy - Balancing Price and Coverage

​When it comes to getting the right policy, it's a balance of price and coverage. Don't be tempted by a cheap policy with a lot of exclusions - public liability is potentially endless and being covered for the imaginable means your business is protected. If in doubt about anything, talk to a business insurance provider - they work with you to find the best policy to suit your situation. ​

Do you have an experience with public liability insurance that you would like to share? Email the MoneyHub team and help improve the way New Zealanders buy business insurance.

Frequently Asked Questions

What industries are more at risk of incidents covered by public liability insurance?

Certain industries may have a higher risk of incidents that could lead to public liability claims. These industries may include:
  1. Construction and trades
  2. Manufacturing and engineering
  3. Retail and hospitality
  4. Professional services (such as consulting, legal, and financial services)
  5. Transport and logistics
  6. Education and childcare
  7. Events and entertainment
  8. Agriculture and farming
  9. Health care and medical services

Know This: It is important to note that any business that has customers, clients, or members of the public visiting their premises or using their products or services may be at risk of a public liability claim, regardless of the industry they operate in.

How can a business in a high-risk industry reduce the risk of a public liability claim?

There are several steps that businesses in high-risk industries can take to reduce the risk of a public liability claim:
  • Implementing safety protocols and procedures
  • Providing training to employees on safety practices
  • Ensuring that all equipment is properly maintained and in good working order
  • Regularly inspecting the premises for potential hazards
  • Having clear warning signs in place where necessary

Is it more expensive for a business in a high-risk industry to get public liability insurance?

A business in a high-risk industry may pay more for public liability insurance due to the increased risk of a claim. However, many factors can affect the cost of public liability insurance, so businesses need to shop around and compare quotes from different insurers.

Can a business in a high-risk industry be refused public liability insurance?

A business in a high-risk industry may be refused public liability insurance if the insurer considers the risk too high. In these cases, the business may need to take additional steps to reduce the risk of a claim, such as implementing additional safety protocols or seeking out an insurer willing to provide coverage.
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Important:
  • MoneyHub Business Insurance is provided by MoneyHub's partner BizCover Limited, a subsidiary of BizCover Pty Ltd (ABN 68 127 707 975, AFSL 501769). MoneyHub earns a commission from BizCover when you purchase a business insurance policy through the MoneyHub website.
  • Due to the nature of business insurance and its complexity, we do not compare all business insurers or products in the market. We do offer any financial or insurance advice, and all content presented is general and does not take into account your objectives, financial situation or needs. You should consider whether the information is suitable for you and your personal circumstances, and before you make any decision about whether to purchase a product, you should read the PDS for that product.
  • For more information about the range of insurers and products compared, how the service works, and how MoneyHub and BizCover are remunerated (remembering that the service is free for you to use), read the About Us section or read BizCover’s Financial Services Guide.