What Does Public Liability Insurance Cover?

Public liability insurance for tradies can cover the costs of your business becoming legally liable to pay for injury to other people or damage to their property. It's a good idea to look at this type of insurance, but you probably have some questions about it. In this article, we'll go over why it matters and what public liability does (and doesn't) cover, so you can decide whether it suits your business.

Public liability in one line

Public liability insurance (or PLI) can protect you against claims of negligence: damage to other people's property, and injury or death to people, caused by your work. For a fuller explanation, read what is public liability insurance?

Some states and territories need it for certain occupations (business.gov.au), and head contractors, councils and clients often ask for it. It can be bought as part of a business insurance policy or separately.

Why is it important?

Public liability insurance can protect you, the business owner, from the cost of claims for injuries to people who are hurt on your site or premises, or damage to their property while you work there. It can also provide protection if someone is injured by a product you supply or install, depending on the policy (products liability is sometimes a separate cover). For example:

• A dropped tool cracks a client's car windscreen.
• A burst pipe floods a client's kitchen.
• A client trips over a lead you left across a doorway and breaks a wrist.
• Paint spilled on a client's carpet means the carpet has to be replaced.

What does it cover?

Public liability insurance can protect your business if there is an accident or injury that you are responsible for. Depending on the policy, it can also cover:

• Claims arising from the work of you and your employees, even when you are not working on your premises at the time of an accident. Contractors you use may need their own cover, so check your policy and ask them for a certificate of currency (proof that their insurance is current).
• People who come onto your site or into your workshop, such as clients and visitors. If a client trips over something in your workshop and is injured, the claim may be covered by public liability insurance.
• Products you sell or supply, including online. Products liability can cover you, depending on the policy, if a product you make, sell or supply, even in the form of a repair or service, causes injury, death or property damage to another business or person (business.gov.au). It is often sold together with public liability, but check, because it may be a separate cover.

How it protects you and your customers

Public liability insurance can protect you from claims of negligence. It can also help your customers, by covering the costs of injury or damage they suffer during a job you do, if you are responsible (for example, if a client slips on a wet floor you left behind, public liability insurance may cover their medical bills).

Having public liability insurance does not stop someone suing you, but it can pay the cost of defending the claim, up to the limit in your policy. It does not usually cover your own loss of profit or damage to your reputation after an incident; business interruption insurance is the cover for ongoing business costs when an insured event interrupts your business.

What public liability usually doesn't cover

• Injury to you or your employees. Injury to your workers is a matter for workers compensation insurance, and public liability does not cover workers compensation claims (WorkCover WA).
• Damage to your own tools, equipment and property. That is a matter for tool insurance.
• Damage or injury caused on purpose, and acts considered unlawful.
• Claims about professional advice or design, which is usually a matter for professional indemnity insurance.

When public liability is worth a look

Public liability is worth looking at if your work brings you into contact with the public, for example if:

• You work in clients' homes or on building sites
• Clients or the public visit your site or workshop
• You supply or install products

Choosing a limit

Common limits are $5 million, $10 million and $20 million. Read our guide how much public liability cover do I need?, or speak to one of our brokers at Tradies365 and get a quote.

Public liability insurance, in short

Public liability won't cover everything, but it's worth a look for any trade business, because it can cover claims from other people if something goes wrong. If you cause injury or damage to someone's property, public liability insurance can cover you financially, up to the limit in your policy. If someone sues you because of an accident that was your fault, public liability insurance can help pay the legal fees. Limits, excesses and exclusions apply, and the insurer decides each claim, so read the product disclosure statement (PDS) or policy wording before you decide.

Talk to one of our brokers at Tradies365 about your options. If you have any questions about public liability insurance, please contact us.