Public Liability Insurance - Price and Cost
How Much Does Public Liability Insurance Cost?*
How much public liability insurance will cost for your business depends on a number of key factors, including:
- The nature and scope of your business
- Your business turnover and size
- Amount of insurance cover your business needs
Public liability insurance may help protect your business against unforeseen incidents that lead to significant financial liabilities. This coverage helps you to focus on your operations without worrying about lawsuits or financial setbacks.
Let’s explore the factors that influence the cost of public liability insurance and share tips on how you can save on your premiums.
Many Business Owners are UNSURE if they are COVERED PROPERLY.
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How Much is Public Liability Insurance for the Self-Employed?*
So, how much will public liability insurance cost you if you are self-employed?
$5 million Public Liability Insurance cost for self employed sole traders, consultants and contractors start from $380 annually or $35 per month for office based occupations.
$5 million Public Liability Insurance cost for some self-employed tradies, such as painters, starts from around $480* or $45 per month.
Below are some indicative costs on how much public liability insurance is for various self-employed occupations .
There are typically many variables so if you want to find out exactly how much public liability insurance is to suitably cover your business activities it’s smart to talk to a SMART Business Insurance broker on 1300 542 573.
What Are The Average Costs of Public Liability Insurance?*
The average costs of public liability insurance in Australia can vary depending on the size of your business.
- Sole traders and Small Businesses: On average, some traders and small businesses may expect to pay from $500 to $1,500 for public liability insurance. Premiums will be higher for high-risk occupations.
- Medium-Sized Businesses: For medium-sized businesses, the cost tends to increase due to higher turnover and more employees. This typically equates from a few hundred dollars to a few thousand dollars more per year than small businesses.
- Large Businesses: Large businesses generally face the highest premiums due to their size and scale. Premiums for large businesses can vary widely depending on the industry, but it is not unusual for them to potentially pay tens or hundreds of thousand dollars annually.
For an accurate cost for your business, consult with an insurance broker to get quotes based on your specific business needs and risk profile.
Please note: While cheap Public Liability Insurance can seem attractive on the surface it is important to ensure the policy covers you for the business activities you undertake and the insurance policy and company will respond as intended when there is a claim.
How Much Public Liability Insurance Do I Need?*
A key factor that determines the price of public liability insurance is the amount of cover, or sum insured.
Typically public liability cover is available in either $5,000,000, $10,000,000 or $20,000,000.
The first two factors:
- The nature of the business, and the size of business, often determine the amount of cover ($) your business will need.
- The general rule of thumb is the greater the risks and/or the larger the business, the larger ($) sum insured.
Important considerations when determining what public liability sum to insure:
- Government departments, councils, schools, shopping centres, some building owners etc. are now often insisting on a minimum limit of $10,000,000 for Public Liability cover for contractors and sub-contractors.
- Some councils and government departments are already insisting on a minimum $20,000,000 limit.
If your business activities include working in the above locations, you will need a minimum of $10,000,000 million public liability cover or even $20,000,000.
How Can Businesses Save on Public Liability Insurance Costs?*
To potentially save on public liability insurance costs, consider the following tips:
- Compare Quotes From Multiple Insurers: Use a broker to shop around to find the affordable rates and suitable terms.
- Manage Risk Factors: An important risk-management factor is keeping your workplace safe by regularly updating and enforcing safety measures. Additionally, train your staff on safety protocols and maintain your equipment to minimise the risk of accident or injury. Finally, consider installing cameras, alarms, and proper lighting to further mitigate risks and lower premiums.
- Bundle Policies: Bundling different types of insurance policies with a single policy, such as a business insurance pack, may help you save money where possible.
- Increase Deductibles: Generally, the higher the insurance deductible you are willing to accept, the lower your premiums will be since you’re assuming responsibility in the event of a claim.
How is the Cost of Public Liability Insurance Determined?*
Various factors affect the cost of public liability insurance in Australia:
Industry and Nature of Business:
The type of business is a factor in determining premiums, as certain industries such as construction or healthcare carry higher risks due to potential liability claims. Generally the riskier the industry your business operates in, the higher the cost of your premium will be.
Annual Turnover and Business Size:
Generally, businesses with more staff or higher revenue levels face increased insurance costs. Your business’s annual turnover may affect how much you pay for public liability insurance. Larger turnovers often mean higher premiums because higher levels of business activity may mean more risk and potential for claims.
The Sums Insured :
Another factor that determines the price of public liability insurance is the amount of cover, or sum insured.
Typically public liability cover in Australia for small and medium sized businesses is available in either $5 million, $10 million and $20 million.
The first two factors:
- The nature of the business, and the size of business, often determine the amount of cover ($) your business will need.
- The general rule of thumb is the greater the risks and/or the larger the business, the larger ($) sum insured.
Important considerations when determining what public liability sum to insure:
- Government departments, councils, schools, shopping centres, some building owners etc. are now often insisting on a minimum limit of $10,000,000 for Public Liability cover for Contractors and Sub-Contractor.
- Some councils and government departments are already insisting on a minimum $20,000,000 limit.
If your business activities include working in the above locations you will need a minimum of $10,000,000 million public liability cover or even $20,000,000.
Claims History: Businesses with a history of frequent or substantial claims may incur higher insurance premiums as insurance companies could consider them to be a higher risk.
Risk Factors: There are some additional risk factors insurers may consider when determining the cost of public liability insurance. These can include your business location (for example, whether it’s in a high-crime area or prone to natural disasters).
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What Are The Other Factors To Consider When Choosing Public Liability Insurance?*
When choosing public liability insurance for your business, there are additional factors that you may need to consider:
Coverage Limits
Choosing adequate coverage limits will help ensure your business is sufficiently protected against potential claims and liabilities. Assess your specific risks and future growth to determine appropriate coverage levels for your business needs.
Exclusions
Public liability policies typically exclude risks covered by more specific insurances. Generally, public liability insurance doesn’t cover employee injuries (handled by workers’ compensation), personal injuries or property damage to the business owner, professional mistakes (covered by professional indemnity insurance), liabilities from specific contracts beyond legal obligations, or damage from hazardous products like asbestos.
Reputation of Insurer
When choosing public liability insurance, look for reputable insurers with a solid reputation for reliable claims processing. It’s a good idea to look for customer reviews and ratings and to also ask other business owners in your industry for their recommendations.
How Business Scope Can Impact on How Much Your Public Liability Costs*
Generally the riskier the industry your business operates in, the higher the cost of your premium will be.
For example, trade industries such as electricians and plumbers present a relatively high risk to persons and property and may receive relatively high public liability premiums.
Smaller sized office based businesses such as graphic designers and bookkeepers which typically present fewer risks to persons and property may receive relatively low public liability premiums.
What is Public Liability Insurance?*
Public liability insurance is a type of business insurance that might safeguard you and your business against claims of negligence. Specifically, it may protect your business from potential liabilities to the public that may arise during your daily operations.
Whether your business involves direct interaction with customers, operates in a high-risk environment, or is situated in a busy location, having public liability insurance may cover legal and compensation costs associated with claims made against your business.
Public liability is sometimes considered a duty of care that businesses have to the public. Without it, your business may risk substantial financial losses, reputational damage, legal penalties, and even forced closure.
What Does Public Liability Insurance Cover?*
Public liability insurance may protect your business from claims related to accidents, property damage, or injuries to third parties that occur during business activities. It may also cover claims arising from the use of your products or services by clients or customers.
Examples of claims include:
- Damage to a third party’s property while performing business services.
- Injury of a person visiting your business or interacting with your business.
- Medical expenses incurred as a result of an incident.
- Legal fees incurred to defend a claim.
Public liability insurance generally doesn’t cover intentional acts or deliberate harm caused by the business owner or employees. Instead, it focuses on liabilities arising from negligence or accidental occurrences during business operations.
What Are The Common Claims Covered By Public Liability Insurance?*
Public liability insurance typically covers claims that arise when third parties (such as customers, clients, suppliers, or members of the public) suffer bodily injury or property damage due to your business activities.
Here are some common examples of claims that may be covered by public liability insurance:
- Slips and falls: Trips, slips, and falls are the most common examples of public liability claims. They can occur due to liquid spills, worn or damaged flooring, or trip hazards
- Falling objects: This may include shop displays falling on a customer, an interior decor feature falling and injuring someone or damaging property, or a fixture that has not been installed properly.
- Defective products: If your business manufactures, sells, or supplies goods, a third party may file a public liability claim if one of your products is defective and causes harm or damage to them or their property. For example, if a toy company sells a defective toy that harms a child, or if an appliance manufacturer sells a faulty microwave that causes a fire.
- Building and construction mishaps: A claim may be made if serious injury or death occurs as a result of a structural issue. For example, during renovations at a shopping mall, a section of scaffolding collapses unexpectedly and injures several shoppers.
- Damage to a third-party property: A claim may be made if your business is responsible for damage to a third-party’s property. For example, a tradesperson from a construction company accidentally damages a storefront with their ladder while walking past causing property damage.
Conclusion*
Public liability insurance is an important consideration for any business, ensuring protection against potential liabilities. Regardless of your business size or industry, having public liability insurance can help to safeguard your company’s growth and success. As a business owner, you have a duty of care to any third party that comes into contact with your company and its operations. Ensure you’re getting suitable coverage for your business needs so that you may mitigate risks.
Looking to compare Public Liability Insurance? Contact a SMART Business Insurance broker today for guidance in securing affordable and suitable coverage for your business.
