What Is Public and Product Liability Insurance?
Public and Product Liability Insurance helps protect your business from legal liability in the event a third party suffers an accident, injury or property damage, caused by your business or by the products you sell. This can include members of the public, customers or suppliers.
It is generally considered to be one of the most important insurance policies for any business to invest in and particularly for small businesses who potentially have the most to lose by not having adequate insurance protection. If you have direct contact with the general public then this cover is going to be a necessity for your business. AIB can help you find a policy tailored specifically to your business needs, industry and budget.
Who Should Consider It?
While Public Liability Insurance isn’t mandatory for most businesses, it is one of the most important business insurance policies you could invest in. However, there are a number of business types where Public Liability Insurance is mandatory. For example, a plumber or electrician in Qld can only obtain or renew their license if they have pulic liability insurance cover. Your AIB business insurance advisor can help you determine what type of policy is going to suit you the best.
Business owners have a legal responsibility to take reasonable steps to ensure the safety of customers, suppliers and the wider community as well as their property and avoid personal injury or property damage.
Even if you are the most careful of operators, unforeseen accidents happen all the time. As a business owner, if you were faced with a public or products liability claim, the financial impact could be catastrophic. Aside from the cost of legal fees or compensation payments, the chances are you would also face issues with business interruption to your business as well as damage to your reputation.
You should strongly consider Public and Product Liability Insurance if:
- you have visitors to your premises or
- you deliver services to clients or customers in public spaces or at their premises or
- your work involves a customer’s property or
- you manufacture or sell products or services
- you use sub-contractors or labour hire personnel in your business or
- you lease or use a business space
At AIB we can tailor insurance packages suited specifically to your needs. As business insurance experts, we can find policies, negotiate insurance contracts and create bespoke packages, regardless of your industry.
What It Can Cover
Public and Product Liability insurance will generally cover the costs of investigating, defending and settling claims made against your business as well as any compensation that you are found liable to pay. It can even cover emotional distress or shock that your business causes another person. Some of the things your policy may cover you for include:
- Loss or damage to someone else's property while you are delivering your service
- Personal injury to others who may be visiting your premises
- Injuries sustained by others whilst using you product
- Loss or damage to goods that you do not own that are in your care or custody
- Somebody acting on behalf of your business when the incident occurred
- Legal costs incurred in investigating, defending or settling a claim
- Liability arising out of advertising carried out by or on behalf of the insured
Do You Need Public and Product Liability Insurance?
What is public liability insurance?
Public liability insurance protects your business if a member of the public is injured or has their property damaged as a result of your business activity. It helps cover legal costs and compensation, reducing the financial risk of unexpected claims.
What does public liability insurance cover?
This insurance typically covers compensation for personal injury or property damage caused to third parties by your business operations. It also covers legal defence costs if a claim is made against your business.
How can I get public liability insurance?
You can arrange public liability insurance through an insurance broker like AIB Insurance Brokers. We work with multiple insurers to compare policies and provide tailored insurance solutions to suit your business needs.
Do I need public liability insurance?
While public liability is not compulsory for most businesses in Australia, there are some exceptions. It depends on the state or territory you are in. Certain trades like electricians and plumbers in Qld require public liability cover to obtain or renew their license. An AIB broker can help you understand the obligations based on your industry, location and contractual obligations.
Do I need public liability insurance as a sole trader?
Yes – sole traders are just as exposed to liability claims as larger businesses. If your work involves any interaction with clients, members of the public, or property not owned by you, public liability insurance offers valuable protection. In addition, if you work in certain trades then it is compulsory in some states and territories.
What’s the difference between public and product liability insurance?
Public liability insurance covers injury or property damage to third parties occurring in the course of your business operations.
Product liability insurance covers injury or property damage caused by products your business supplies or manufactures.
What is product liability insurance?
Product liability insurance covers your business for claims made due to defective products that cause injury or damage. It provides protection for manufacturers, distributors, and retailers against consumer lawsuits related to product faults.
Is product liability insurance compulsory?
Product liability insurance is generally not legally required but may be necessary under some contracts depending on your state or territory. It is, however, strongly advised to obtain product liability insurance – especially if your business manufactures, distributes, or sells products – since product-related claims can be costly.
