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Do I need Public Liability Insurance Insurance?

Public Liability insurance* is an important type of cover, as it can provide protection for you and your business if a customer, member of the public or a supplier suffer property damage or are injured (and not covered by the Accident Compensation Commoission) as a result of your negligent business activities.

Understanding how Public Liability insurance can protect your small business doesn’t need to be difficult, we’ve put together some of the key things you need to know below.

Protecting your back pocket

The reality is mistakes can happen, products can malfunction and things can go wrong. A claim can have a costly impact on your business and potentially devastate your reputation too.

Even if you don’t have visitors to your working site, store or home office, a Public Liability claim could still occur against your business, for example, if you accidentally cause property damage to your client’s home while renovating.

Risks to the public exist everywhere and many are not obvious. Public Liability insurance will help provide much needed protection against unforeseen costs, such as compensation and legal fees.

Without having Public Liability insurance, your business is at risk of having to pay in full damages in the event it is found to be liable following a Public Liability claim. Even the smallest of incidents could significantly impact the financial situation of your business.


How much Public Liability insurance do I need?

The level of cover your business requires will depend on a few factors, like the level of risk your business is exposed to, the type of work you do and any contractual or industry requirements.

Common levels of cover available are $10 million and $20 million, however some insurers do offer differing amounts.

How much does it cost?

No two policies are the same, and the same goes for pricing, with each business rated according to their risk factors. Below are some of the factors an insurance underwriter will assess to accurately price a policy:

  • The type of business you run and the industry it operates in
  • The annual turnover
  • The number of employees (including subcontractors)
  • The claims history of the business

Typically, the greater the risk, the higher the premium. For example, a large-scale building business with several projects on the go and a mix of permanent and contracted staff would typically be paying more for Public Liability insurance than a home-based accounting firm.

Is Public Liability insurance a legal requirement?

While not a legal requirement in New Zealand, there are often some industry expectations when it comes to a minimum level of Public Liability cover  for some businesses. For example, the construction industry will often require subcontractors and contractors to have their Public Liability insurance cover in place before they even step on site.


*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.