Public Liability Insurance - Price and Cost

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.

However, as they say, SIZE does matter.

So, for example, a graphic design business with 30 people may most likely receive a larger public liability cost than a sole trader electrician, despite the electrician being in a far riskier industry.

The third 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 $5million, $10million and $20million.

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:

1. 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.
2. 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.