Public liability insurance protects your business if a member of the public is injured or their property is damaged because of your work. Think a customer slipping in your shop, a coffee spilled on a client’s laptop, or a tradie cracking a customer’s benchtop. It helps cover compensation and legal costs, and funds your defence even if the allegation turns out to be unfounded. It doesn’t cover your employees’ injuries or your own property.
This guide sets out when cover is compulsory in Australia, when it’s required by contracts or site access, and when it’s simply sensible risk management. You’ll find a quick checklist to decide if you need it, what’s covered (and not), typical limits and costs, industry snapshots, how liability and motor policies work together, and step‑by‑step tips to claim and get insured with confidence.
Is public liability insurance compulsory in Australia?
Not usually. Public liability insurance isn’t a legal requirement for most Australian businesses, but it is compulsory for some licensed trades and activities depending on your state or territory. For example, it’s required for electricians in Queensland (often with at least $5 million cover and a consumer protection extension) and plumbers in Victoria. It’s also commonly mandated by councils, site managers, principals, and commercial leases. Always check your licence conditions and state regulator, plus any contract or site access terms.
Do I need public liability insurance? A quick checklist
Use this quick checklist to decide whether you need public liability insurance in Australia. If you tick any box, cover is strongly recommended; if a licence, contract, council or site requires it, it’s compulsory. It’s about protecting against third‑party injury/property damage claims and the legal costs to defend them, even for small, home‑based or mobile businesses.
- Clients/suppliers visit you: Office, shop, studio or home.
- You work off-site/public spaces: Client premises, sites, markets or pop‑ups.
- You sell/supply/repair products: Goods or installs could cause harm.
- You host events or stalls: Trade shows, expos or community events.
- Licence or permit requires it: State trade licence or council approval.
- Contracts/leases demand it: Site inductions, principal contractors, landlords.
- You use subcontractors: More public interaction, more exposure.
- You want legal defence cover: Even if allegations are unfounded.
What public liability insurance covers
Public liability insurance pays for your legal defence and compensation if your business activities cause third‑party injury, death or property damage. It can respond whether an incident happens at your place, a client site or in public, and many policies also package products liability for harm caused by what you make, sell or install. Crucially, it can fund your defence even when allegations are unfounded.
- Legal defence and damages: Solicitors, court costs and compensation if you’re found liable.
- Injuries on premises or jobs: Slip, trip and fall incidents involving customers, suppliers or visitors.
- Product‑related harm: Illness or injury caused by undercooked food or faulty installs.
- Third‑party property damage: Accidental damage you cause to someone else’s property.
- Immediate first aid costs: Reasonable first aid expenses at the time of an incident.
- May include extensions: Cover for others acting on your behalf, third‑party goods in your care, and recognised psychiatric injury or consequential loss arising from negligence (policy‑dependent).
What isn’t covered and complementary policies to consider
Public liability protects you for third‑party injury and property damage, but it won’t plug every risk in your business. Knowing the gaps helps you add the right safety net so a single incident doesn’t spiral into downtime, lost income or a costly dispute you’re not insured to fight.
- Injuries to employees: Get workers compensation (required if you employ staff).
- Damage to your own property/tools/stock: Consider business contents/building and portable equipment; add business interruption for cashflow after insured damage.
- Vehicle crashes and road risks: Covered by commercial motor; third‑party personal injury via CTP registration.
- Professional advice or errors: Needs professional indemnity insurance.
- Cyber incidents and data breaches: Take out cyber insurance.
- Product recalls: Separate recall cover is needed.
- Product harm exposures: Ensure products liability is included (often packaged with public liability).
How much public liability insurance do I need?
Start with what’s mandated. If your licence, lease or contract specifies a limit, meet it. For example, Queensland electrical contractors must hold public and products liability of at least $5 million (plus a consumer protection extension). Beyond that, choose a limit that matches your worst‑credible claim and where you work.
- $5 million: Often the floor set by trade licences or small jobs.
- $10 million: A very common contractual requirement and a sensible minimum for most SMEs.
- $20 million: Typical for busy public sites, larger principals, or higher‑hazard activities (many policies offer up to this limit).
If in doubt, ask what limit site owners or principals expect before you quote.
How much does public liability insurance cost?
There’s no set price for public liability insurance. Premiums are risk‑rated and vary by your industry and the way you interact with the public, plus the limit you choose (commonly $5m, $10m or $20m). If a licence or contract requires higher limits, expect a higher premium. The smartest path is a tailored quote—packaged policies are often cheaper.
- Occupation and activities: Hospitality, trades, consulting and more.
- Where you operate: Your premises, client sites, events or public spaces.
- Products exposure: Whether products liability is included with your policy.
- Required limit: Licences, leases or contracts may mandate $5m/$10m/$20m.
- Policy packaging: Bundling with other business or motor policies can reduce cost.
Industry snapshots: tradies, retailers, hospitality, consultants and events
Different businesses have different “public moments” where things can go wrong. Here’s how risk shows up for common industries, and why public liability insurance is often required by licences, contracts or site owners—or simply the smart way to protect cash flow. Claims are especially common for hands‑on work and public‑facing venues.
- Tradies: On‑site work means property damage and trip hazards; licences/contracts often demand cover.
- Retailers: High foot traffic brings slips, display collapses, and courier injuries at your premises.
- Hospitality: Food‑related illness, hot‑liquid spills and crowded floors raise injury/property‑damage risks.
- Consultants: Client visits or hot‑desking risks—spilled coffee on laptops, damaged furnishings; advice needs PI.
- Events/markets: Councils/venues typically require proof of cover—$10m limits are commonly specified.
Sole traders and home-based businesses: what to know
If you’re a sole trader or run a business from home, you still face public liability exposure. Claims can arise if a visitor trips in your home office, a courier is injured at your door, or a product you sell causes harm. Public liability insurance isn’t compulsory for most, but it can cover incidents at your home-based premises and while you work off‑site—protection that many councils, venues and clients will also require.
- Clients/suppliers visit your home
- You sell or repair products (incl. online)
- You work at clients’ premises
Public liability doesn’t cover your own injuries—if you employ staff, get workers compensation; if you’re a sole trader, consider personal accident/illness cover.
Working at client sites or on the road: liability vs motor insurance
If you work at client sites or spend time on the road, you typically need both public liability and motor cover. Public liability responds when your work (not your driving) causes third‑party injury or property damage. Motor policies handle crashes and vehicle‑caused damage; CTP attached to registration covers injuries to other road users.
- Vehicle collision: Commercial motor for third‑party property damage; CTP for injuries.
- Damage during the job: Public liability if you drop a tool and crack a client’s benchtop.
Contract and site access requirements you’re likely to see
Before you step on site, landlords, councils, principal contractors and venue managers often set insurance conditions. The common thread: prove you hold public liability at a specified limit and keep it current for the life of the job, event or lease. Clarify the exact limit and inclusions early so you can quote and schedule confidently.
- Certificate of Currency: Shows insured name, policy dates and limit.
- Minimum limit: Often $10m; public venues may require $20m. Some licences set floors (e.g., QLD electricians need at least $5m plus a consumer protection extension).
- Public and products liability: Many contracts expect both to be included.
- Maintain cover for the term: Required by most contracts and commercial leases.
Making a claim: what to do when something goes wrong
If an incident happens, act fast and keep it factual. Your policy is there to defend you—even if the allegation is unfounded—so early notification helps your insurer manage the claim and appoint assessors or lawyers if needed. Don’t admit liability or offer to compensate on the spot; contracts often require you to pass all claims straight to your insurer.
- Make safe and assist: Call emergency services/first aid if required.
- Record the basics: Date, time, location, what happened, who was involved.
- Capture evidence: Photos/video; keep any damaged items.
- Collect witnesses: Names, contacts, brief statements.
- Preserve paperwork: Contracts, quotes, emails, job sheets.
- Notify your insurer/broker promptly: Provide facts and documents; don’t repair or settle without approval.
- Redirect correspondence: Send demands or legal letters to your insurer and keep a claim log.
How to get covered with confidence
Getting covered shouldn’t be hard. Start by confirming what’s required, then choose a limit and inclusions that match your risk and where you work. The goal is a policy that satisfies licences and site access, defends you when a claim lands, and produces a Certificate of Currency fast so you can get on with the job.
- Map requirements: Licence, contracts and venue/council.
- Pick a limit: $5m, $10m, or $20m.
- Include products liability: Often expected by principals.
- Match details: Insured name/ABN and business activities.
- Disclose accurately: Turnover, locations and subcontractors.
- Know your gaps: Exclusions, extensions and your excess.
- Ask turnaround times: Certificate of Currency and claims.
- Compare smartly: Consider bundling with motor/business to save.
Key takeaways
Public liability isn’t legally compulsory for most Australian businesses, but it’s frequently mandated by licences, landlords, councils and site contracts. It covers third‑party injury and property damage from your business activities, funds your legal defence, and helps you keep trading with confidence.
- Not compulsory for most; often required by licences/contracts.
- Covers third‑party injury/property; excludes employees.
- Choose limits to suit risk— $10m is common.
- Add PI, cyber, motor, workers comp to fill gaps.
Get covered fast with National Cover.
