How Much Does Public
Liability Insurance Cost?

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How much does Public Liability Insurance cost?

On average, small business owners can expect to pay around $49 per month for Public Liability insurance. Also known as General Liability or Broadform Liability, Public Liability insurance is an essential form of cover for almost every type of business, from trades and services industries to white collar professionals and office based occupations. It is designed to protect you against your legal liability for accidental damage to other people’s property, or if someone was injured as a result of work carried out by your business but is not covered by the Accident Compensation Corporation (ACC).

Given the wide range of industries and occupations that require Public Liability insurance, the cost of a policy can vary considerably, determined by a number of key factors which include:

  • Your occupation
  • The type and nature of your business
  • Your business turnover and size
  • The amount of insurance cover your business requires

Other factors that could affect the cost of your Public Liability policy include the location of your business, the inclusions and exclusions of your policy, and the insurance provider you select.

To give you an idea, we have put together a snapshot of how much a stand-alone Public Liability insurance policy can cost for a small business, by analysing data from BizCover policies sold over the course of 2017. Our data includes more than 1,000 businesses across many different occupations, which have 20 or fewer employees.

However, the most accurate way to find out the true cost for your business is to simply get an instant online quote.

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What is the average monthly premium for Public Liability insurance?

Although the average cost across all industries is $49 per month, forty-seven percent of BizCover customers pay between $20 and $39 per month.

A further thirty-three percent of customers pay between $40 and $59 per month for their Public Liability insurance, and only six percent pay $100 or more.

Below is the full breakdown.

*Data based on New Zealand BizCover customers

What is the average cost of Public Liability insurance by industry?

Typically, the type of industry that your business operates in is one of the biggest determining factors when it comes to calculating the cost of your Public Liability insurance. Businesses that are considered to have a higher risk exposure of causing personal injury or property damage will generally attract a higher premium and vice versa.

For example, businesses within the trades and services, retail and hospitality industries usually have higher premiums as there are a number of things that could potentially go wrong that could lead to a claim being made – think about tradesmen accidentally damaging their client’s property.

However, our data shows a different story with some lower risk professional occupations, such as IT consultants, engineers and other consultancy occupations, coming in with higher premiums. This is only due to our data being based on stand-alone Public Liability policies, as opposed to the Liability packages that we have negotiated with our insurers to combine Professional Indemnity and Public Liability cover which offer much more competitive premiums.

It is also important to note that each insurance company assesses risk in different ways, and as such, what one insurer may consider as a high-risk occupation may not be considered high risk by another. This is often due to the number of claims each insurance company has received for each specified occupation.
Below is the full breakdown.

*Data based on New Zealand BizCover customers

How much do Tradesmen pay for Public Liability Insurance?

Within the Trades & Services industry there are many different types of occupations with varying degrees of risk. This also means that the premiums vary greatly from one trade based occupation to another.

Looking at our top 10 trades and services occupations, it is evident that Plumbers, Electricians, Painters and Commercial Cleaners attract the highest premiums, with an average of $43 to $48 per month. This is predominantly due to the nature of their job – things might not go wrong for these occupations very often but when they do claims can cost thousands of dollars.

Handymen, Tilers, Gardeners and Domestic Cleaners all came in at the lower end of the scale due to the lower perceived risk, paying under $40 per month on average for their Public Liability insurance.

Here are the average premium our top 10 Trades & Services occupations are paying for their Public Liability

*Data based on New Zealand BizCover customers

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Does the size of my business affect the premium?

The number of employees and the amount of revenue your business turns over can have an impact on the cost of your Public Liability policy.

Unlike the ‘safety in numbers’ theory, the more employees you have, the more likely it is to result in a higher premium. More employees equals more risk, particularly for trades and service based industries. For example, an electrical contracting business with 10 employees, each visiting multiple locations on any one day, has a higher chance of something going wrong compared to a sole trader electrician who may only visit a handful of locations.

In contrast, when it comes to office based occupations, revenue plays an important role for insurers to determine pricing. The higher the turnover, the higher the premium. A business generating up to $100,000 can expect to pay anywhere from $42 to $50 per month on average, compared to $56 to $72 on average for businesses turning over between $100,001 to >$500,000.

*Data based on New Zealand BizCover customers

Does the level of cover affect the premium?

As with most things in life, the more you buy of a particular product or service, the more it will usually cost. However, fortunately when it comes to Public Liability insurance the cost does not rise too significantly with an increase in the amount of coverage. For example, the average cost of $1 million worth of cover is around $40, however, increasing the cover level to $5 million only increases the premium to around $80 on average.

The most common level of cover amongst our New Zealand customer base for Public Liability insurance is $1 million, however there is the option to take out $2, $5, $10 or $20 million worth of cover, depending on your business needs.

What is the average monthly cost of Public Liability insurance by level of cover?

Coverage levelAverage Public Liability premium (Monthly)
$1 Million$39.39
$2 Million$48.28
$5 Million$79.08
$10 Million$115.44
$20 Million$160.14

*Data based on New Zealand BizCover customers

Infographic showing the average cost of Public Liability Insurance

* 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.

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