Public liability insurance covers your business if a third party (customer, visitor, member of the public) suffers injury or property damage as a result of your business activities. While not legally required in every state for every industry, it is effectively mandatory for most small businesses — landlords, clients, and government contracts almost universally require it.
Standard policies cover legal costs and compensation for claims arising from bodily injury or property damage caused by your business operations, products, or employees acting in the course of their work. Common claim scenarios include: a customer slipping in your premises, damage to a client's property during a service call, or injury caused by a product you sold.
Cover amounts typically range from $5 million to $20 million. For most small businesses, $10 million is standard. Premiums vary widely by industry and risk profile — a desk-based consultant might pay $300-$600 per year, while a builder or tradie might pay $800-$2,000. Higher-risk trades (roofing, demolition, asbestos) pay significantly more.
Public liability is different from professional indemnity insurance (which covers financial loss from negligent advice or services) and product liability (often included in public liability policies but sometimes separate). Many businesses need both public liability and professional indemnity.