What Is Public Liability Insurance?

Head contractors, councils and clients often ask tradies for public liability insurance. It can stop you having to pay out of pocket if someone is injured on your site, or their property is damaged because of your work. Public liability insurance can cover you for claims made by third parties, such as customers, visitors or passers-by, who are injured while on your business premises or where you are working. To see how the cover works for your trade, read about public liability insurance for tradies.

Why public liability insurance matters

Public liability insurance, or PLI, is a type of insurance that can protect tradespeople against claims of negligence. If someone is injured at your property and they sue you, PLI can be used to cover these costs. If your work damages a client's property or injures someone and they claim against you, the policy may pay the cost of defending that claim, depending on the policy. Fixing the faulty work itself is usually not covered.

PLI can also cover situations where no one is injured but there is still potential for large damages, such as damage to a client's property caused by your work. The public liability policy may cover those costs as well.

What is covered

Public liability insurance can cover damage to property and injury to third parties. If a tradesperson causes an accident, personal injury awards may be paid by the insurer, up to the policy limit and subject to the policy terms. If you accidentally damage someone else's property in the course of your work, then this can also be covered.

Public liability insurance can also cover the legal costs of defending claims related to your work as a tradesperson. Depending on the policy, this can include claims for:

• Damage caused by faulty products or services provided by a tradesperson.
• Damage caused by products supplied or installed by a tradesperson.

Claims about incorrect advice are usually a matter for professional indemnity insurance, and injuries to your own workers are a matter for workers compensation insurance.

Choosing a limit

Common limits are $5 million, $10 million and $20 million. If a head contractor, council or client has asked for a particular limit, choose at least that. Read more in how much public liability cover do I need?

What is not covered

You might think that public liability insurance covers everything, but there are some things that it usually doesn't:

• Deliberate damage or misconduct
• Your own property (this includes your tools)
• Injury to your own employees (that is a matter for workers compensation); subcontractors may need their own cover
• Products that you sell to customers, unless your policy includes products liability

What sets the premium

The cost depends on the size and type of your business, your location and the cover limit you choose. Read more about how much public liability insurance costs.

Find out more about public liability insurance

Public liability insurance is a policy that can cover you if a client or another third party makes a claim against you. There are many types of public liability insurance available on the market, but they all serve the same purpose. The first thing to know about public liability insurance is that it can protect you if you are sued by someone who has been injured or had property damaged because of your work, whether on your premises or on a job. If an employee gets hurt at work, that is a matter for workers compensation insurance, not public liability. The cost of public liability insurance varies depending on the insurer and how much cover you want for your business, so it is worth comparing quotes before you commit to one.

Conclusion

Public liability insurance can cover claims from other people for injury or damage caused by your work, within the limits and terms of the policy. If you're still unsure whether a policy suits your business, get in touch for more information on how we can help with your insurance.