Public liability insurance: what it covers and how to compare it
Public liability insurance (PL) covers your business if someone dies, is injured or has their property damaged because of your negligence while you are running your business. It pays the compensation you are legally liable for and the cost of defending the claim, up to a limit you choose, often $10 million or $20 million. It covers customers, clients, suppliers and members of the public, but not your own employees, who are covered by workers compensation.
Most businesses aren't required by law to hold it, although some states require it for certain occupations. In practice it is often compulsory anyway: councils make it a condition of permits, head contractors write it into subcontracts, and landlords put it in leases. This page explains what it pays for, what it doesn't, how to choose a limit, what sets the premium and how to compare quotes.
By Better Rate Mate Editorial Team · Last reviewed
General advice only. It doesn't consider your circumstances. Read the PDS and TMD before you decide.
What public liability insurance covers
The cover responds to claims by third parties, meaning anyone other than you and your employees, for injury or property damage that happens in connection with your business. Typical claims:
- A customer slips on a wet floor in your café and breaks a wrist.
- A member of the public trips over a cable you ran across a footpath during a job.
- You crack a client's benchtop or flood their bathroom while working in their home.
- A stall visitor is hurt when your market gazebo blows over.
- The legal costs of defending a claim, including one that turns out to have no merit.
Is public liability insurance compulsory?
For most businesses, no law requires it. business.gov.au notes that some states and territories require public liability for certain occupations, and some licensing schemes make it a licence condition.
In practice it is often compulsory anyway. Councils make it a condition of permits, head contractors write it into subcontracts, landlords put it in leases, and event organisers require it of stallholders, each with a minimum limit and a certificate of currency to prove it. If you employ anyone, workers compensation is the cover the law does require, because public liability doesn't cover your own staff.
What public liability insurance does not cover
Most of the gaps are covered by a different policy. Knowing which is which is the fastest way to work out what else your business needs.
The two that catch people most often: injuries to your own staff belong to workers compensation insurance, which is compulsory once you employ anyone, and a client's financial loss from your advice belongs to professional indemnity insurance. Injury caused by goods you sold after they leave you is product liability, often bundled in, and a data breach is a job for cyber insurance.
| Not covered by public liability | Where to look instead |
|---|---|
| Injury to your own employees | Workers compensation, compulsory once you employ people |
| Injury to you, the business owner | Personal accident and illness or income protection |
| Financial loss from your advice, design or professional service | Professional indemnity |
| Injury or damage caused by a product after it leaves you | Products liability, usually bundled as public and products liability |
| Damage to your own premises, stock, tools or equipment | Business property, contents or tools cover |
| Injury caused by a registered vehicle | CTP insurance, which comes with registration |
| Damage your vehicle causes to other people's property | Commercial motor insurance |
| Your own faulty workmanship (the cost of redoing it) | Generally uninsured; check for limited extensions |
| Claims arising from a cyber incident or data breach | Cyber insurance |
| Fines and penalties, and deliberate acts | Not insurable |
What $10 million or $20 million of cover actually means
The figure is the limit of liability: the most the insurer will pay for claims arising from any one occurrence. It isn't the price, and it isn't a payout you receive. If a customer's injury claim settles for $400,000, the insurer pays the $400,000 (less any excess) whether your limit is $5 million or $20 million. The limit only matters when a claim is catastrophic, which is exactly when it matters most.
For public liability the limit usually applies per occurrence, so a second, unrelated claim in the same year gets the full limit again. If your policy also includes products liability, that part is commonly subject to an annual aggregate, which is the most the insurer will pay for all products claims in the period combined. Check how the policy treats defence costs, too: some pay them in addition to the limit and others inside it.
How much you need is usually decided for you. Contracts, permits and leases name a minimum. The City of Melbourne, for example, requires public liability of at least $20 million for a single claim when you hold a permit for an activity in its public spaces. Where nobody sets a figure, weigh the worst realistic injury your work could cause. Serious injury claims can run to millions, and anything above your limit is yours to pay.
Who needs public liability insurance
Any business that deals with customers, works on other people's property or trades in public spaces carries the risk public liability covers. The table shows why it matters for common types of business and who usually asks for it.
| Business | Why it matters | Who usually asks for it |
|---|---|---|
| Tradies and contractors | You work on other people's homes and sites, where most damage and injury claims start. See public liability for tradies | Head contractors, builders, councils |
| Builders | You carry the site, the public and the works; public liability sits beside contract works and home warranty. See builders insurance | Head contractors, councils, government and commercial clients |
| Sole traders | You and the business are the same legal person, so an uninsured claim reaches your personal assets. See public liability insurance for sole traders | Clients, councils, landlords |
| Shops and showrooms | Customers and suppliers come onto your premises | Landlords and shopping centres |
| Cafés, restaurants and food vans | Customers can slip, trip or be burnt; illness from food you supply is product liability | Landlords, and councils for footpath trading and events |
| Market stalls and event businesses | Members of the public are around your stall, equipment or activity | Councils and event organisers |
| Mobile services such as cleaners and groomers | You work inside clients' homes and businesses | Commercial clients and contracts |
| Pet care businesses: groomers, dog walkers and pet sitters | Animals in your care can injure people or damage property, and you work in clients' homes and public places | Clients, councils for park use, and venues |
| Personal trainers and outdoor activities | Clients can be injured in sessions you run, often in public places | Councils issuing permits for parks, and venues |
| Consultants and office-based businesses | Visitors to your office; your bigger risk is usually your advice, which is professional indemnity | Landlords; clients may ask for PI instead |
Who asks for public liability insurance, and what they want to see
Even where no law requires it, the people you work with often will. The requirement usually comes with a minimum limit and a request for proof.
| Who | When | What they usually want to see |
|---|---|---|
| Local councils | Permits for markets, footpath trading, events and other activities on council land | A certificate of currency at the council's minimum limit (City of Melbourne: at least $20 million for a single claim) |
| Head contractors and builders | Before a subcontractor starts on site | A certificate of currency at the limit in the subcontract, sometimes the principal noted as an interested party |
| Landlords and shopping centres | In a commercial or retail lease | Cover at the lease's minimum limit, often with the landlord noted on the policy |
| Event organisers and venues | Stallholders, performers, hirers and exhibitors | A certificate of currency for the event dates |
| Government agencies and larger clients | Supplier panels and contracts | Minimum limits written into the contract |
| State licensing schemes | Certain licensed occupations in some states | Evidence of cover as a licence condition |
Certificates of currency, interested parties and principal's indemnity
A certificate of currency is a one-page document from your insurer confirming your policy is in force, the limit and the period of cover. Most insurers let you download one straight after you buy. Councils, head contractors and landlords ask for it, and many ask again when it expires.
Some contracts go further. Being asked to note the principal as an interested party means the insurer records their interest in the policy. A principal's indemnity extension goes further still: it lets your policy respond to a claim made against the principal arising from your work. If a contract calls for either, ask your insurer before you sign, because not every policy offers them.
How a public liability claim works
Tell your insurer as soon as you know about an incident that could lead to a claim, even if nobody has claimed yet. Your policy's claims conditions set out how and when to notify it.
Don't admit liability, offer to pay or settle with the person claiming without the insurer's consent. Liability policies commonly make that a breach of the policy. Under section 41 of the Insurance Contracts Act you can ask the insurer in writing whether it accepts that the policy covers the claim and whether it will run the negotiations and any court case for you. If it doesn't tell you both within a reasonable time, it can't refuse or reduce the claim just because you then settled it yourself.
Keep the evidence: photos of the scene, the names of witnesses, job sheets, quotes and invoices, and every letter from the person claiming or their lawyer. Pass that correspondence to the insurer.
If the claim is accepted, you pay the excess shown on your policy. If it's refused and the insurer's internal review doesn't resolve it, check whether the Australian Financial Complaints Authority (AFCA), which provides free, independent dispute resolution, can take your complaint.
How much does public liability insurance cost in Australia?
There's no standard price for public liability insurance in Australia. Insurers rate each business on the chance of a claim and its likely size, so your occupation, turnover, the limit you choose and your claims history set the premium. The only reliable way to know your price is to get like-for-like quotes for your exact work from several insurers.
The table shows which way each factor usually moves the premium. It gives direction only, not dollar figures, because any published average is one insurer's or broker's own mix of businesses.
| Factor | Usual effect on the premium | Why |
|---|---|---|
| Higher-risk occupation (roofing, demolition, work at heights) | Up | More chance of serious injury or damage |
| Higher turnover | Up | Insurers use turnover to measure how much work you do |
| Higher limit ($20 million instead of $10 million) | Up | The insurer is exposed to larger claims |
| Products liability added | Up | Covers injury or damage from goods you sell or supply |
| Using subcontractors | Up | More people working under your policy's cover |
| Hazardous work such as hot work or underground digging | Up, or excluded unless declared | Some policies exclude it unless safety standards are followed |
| Higher excess | Down | You carry more of each claim yourself |
| Clean claims history | Down | Past claims are the strongest predictor of future ones |
Public liability rules by state
No state or territory requires every business to hold public liability insurance. business.gov.au says some states and territories require it for certain occupations, and the requirement usually sits in a licence condition, a council permit, a lease or a contract rather than a general law. That's why the rule you need to follow depends on what you do and where, not just which state you're in.
Councils are the most common source of a fixed minimum. The City of Melbourne, for example, requires public liability of at least $20 million for a single claim when you hold a permit for an activity in its public spaces, such as street trading or an event. Other councils set their own minimums in their permit conditions, so check the conditions of any permit you apply for. For trade licences, check with your state's licensing body; our tradie insurance guide sets out the licence rules we've confirmed with each regulator.
Tasmania is one state where the licence itself sets a figure. Consumer Affairs Tasmania requires $5 million public liability insurance for builder, fire protection services and demolisher licences, at least $5 million cover for injury and property damage for plumbing contractors, and $5 million public and products liability for electrical contractors, with a certificate of currency at application (as at 11 October 2026).
Public and products liability: why they're sold together
Most small business policies sell public liability and products liability as one section, often called public and products liability. Public liability covers injury or damage caused by your business activities; products liability covers injury or damage caused by goods you make, sell, supply, install or repair after they leave your hands. business.gov.au notes you may need product liability if you make, sell or supply goods, even as part of a repair or service.
The two limits often work differently. Public liability usually applies per occurrence, while products liability is commonly an annual aggregate, the most the insurer will pay for all products claims in the period. If you sell, import or install anything, check the products section is switched on and what its aggregate is. Product liability insurance explains the cover in detail.
How much is $20 million public liability insurance?
It depends on the same factors, so the honest answer is a method rather than a number. Get quotes for your exact occupation and turnover at both $10 million and $20 million, with the same excess and the same extensions, from several insurers. The difference between the two prices is what the extra $10 million of protection costs your business.
The extra $10 million only comes into play for a claim larger than $10 million, so don't assume the premium doubles with the limit; let the quotes show you. If a contract or permit requires $20 million, compare quotes at that level rather than buying less and hoping it's accepted.
How to compare public liability quotes like for like
A cheaper quote is only cheaper if the cover matches. Hold these details constant across every quote:
| Detail | What to check |
|---|---|
| Occupation description | It matches everything you actually do, including any secondary work |
| Limit of liability | The same limit on every quote, at least what your contracts require |
| Products liability | Included or not on every quote, and whether it is aggregate |
| Excess | The same excess; property damage excesses are often higher than injury excesses |
| Key exclusions | Heights, depths, hot work, asbestos and property in your care, custody or control |
| Territory | Australia only, or wider if you work overseas |
| Extensions | Principal's indemnity, interested parties and cover for subcontractors if you need them |
General advice only. This information doesn't take into account your objectives, financial situation or needs. Consider whether the product is right for you and read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you decide. We don't compare every product in the market, and we may earn a commission if you take up a product through our links.
What to watch for
- Describe your occupation fully. Work you didn't declare is the most common reason a public liability claim is disputed.
- Check the property in your care, custody or control exclusion if you work on clients' belongings or premises.
- Read the contract, lease or permit before you buy so the limit and wording match what is required.
- Remember your own staff aren't covered. If you employ anyone, you also need workers compensation.
- Renew before the certificate of currency expires; sites and councils will ask for a current one.
Common questions
What does PL mean in insurance?
PL stands for public liability. Public liability insurance covers your legal liability if a customer, client or member of the public is injured, or their property is damaged, because of your business activities, up to the limit you choose.
Who are the biggest insurers in Australia?
On APRA's latest insurer-level figures, for the six months to 30 June 2023, the five largest general insurance groups by gross earned premium on Australian business were Insurance Australia Group (IAG), Suncorp, QBE, Allianz and Hollard. If you buy through a broker or an underwriting agency, the insurer may not be the brand you dealt with: your certificate of currency names it. See Australia's biggest insurance companies for the figures and the life and health insurers.
What is public liability insurance for?
It covers your legal liability if someone other than your employees dies, is injured, or has their property damaged because of your negligence in running your business, including the cost of defending the claim.
How much is $20 million public liability insurance in Australia?
There's no single price. It depends on your occupation, turnover, staff, claims history and excess. Get quotes at both $10 million and $20 million with everything else identical; the difference is what the extra cover costs your business. The premium doesn't simply double with the limit.
How much does public liability insurance cost?
Insurers price it on your occupation and activities, turnover, the limit, whether products liability is included, staff numbers, where you work, your claims history and the excess. Higher-risk trades pay more than office-based work. Compare quotes with identical details.
Do I need an ABN to get public liability insurance?
Business public liability policies are designed for people carrying on a business, and most insurers ask for your ABN when you apply. If you're running a one-off event or a hobby activity without an ABN, ask the insurer or event organiser about event or personal liability cover instead.
What is not covered under public liability?
Injury to your own employees, injury to you, financial loss from professional advice, damage to your own property and tools, vehicle-related injury and damage, the cost of redoing faulty work, and fines. Products liability may be excluded unless it's included in the policy.
Does public liability cover my employees?
No. Injuries to your employees are covered by workers compensation, which is compulsory once you employ people.
What do I have to tell my insurer?
Everything relevant to its decision to insure you and on what terms. Business policies aren't consumer insurance contracts, so the Insurance Contracts Act's duty of disclosure applies: before the policy starts or renews, you must disclose every matter you know, or a reasonable person in your position could be expected to know, is relevant. You don't have to disclose things that lower the risk, are common knowledge or the insurer already knows. If you breach the duty, the insurer can reduce a claim to put itself where it would have been had you disclosed, or avoid the policy altogether if the breach was fraudulent.
Is public liability insurance tax deductible?
The ATO lists public risk insurance among the premiums a business can generally claim as an operating expense. Check your own situation with your accountant.
General information only
This page explains how public liability insurance generally works in Australia. It is not advice about your business or any particular policy. Read the Product Disclosure Statement and Target Market Determination before you buy.