Public Liability Insurance Explained 

As a small business owner, there is a lot to think about when running your own business. Whether it’s balancing the books, creating marketing plans or connecting with customers, the list goes on. But when it comes to protecting your business, it‘s crucial to understand the importance of business insurance and the different kinds of products that are available.  

Let’s delve into our simple guide on Public Liability insurance explained. 

What is Public Liability Insurance*?  

Public Liability insurance protects you and your business against the financial implications if you are found liable for loss or damage to other people’s property, or cause illness or injury that is not covered by the Accident Compensation Commission (ACC). 

If you are found negligent, the financial repercussions can be devastating. The cost of defending yourself alone could put you out of business, and then there’s the cost of settlements, whether agreed out of court or awarded by the court. With the right Public Liability cover, your insurance company will provide much needed funds to cover your legal costs and any compensation claims, leaving your business free of financial risk. Phew! 

Most public liability policies also extend to Product Liability cover. If you sell, supply or deliver goods, even in the form of repair or service, you may need cover for claims made against you where goods have caused damage or injury. Product Liability insurance covers you if any of these events happen to another business or person by the failure of your product or the product you are selling. 

Even the most careful businesses run the risk of damaging something during the course of operations. And you don’t want to be left with empty pockets (and some) because you tried to save a bit of cash by not purchasing the right amount of Public Liability insurance, or worse, didn’t have any at all. 

If the risk to your businesses is such that you would go out of businesses should you experience a public liability claim, then you need to have it. It’s as simple as that. 

And if you are doing business with another business, make sure they have public liability insurance too, so all’s well that ends well should an accident occur from their negligence. 


What does Public Liability insurance typically cover and exclude? 

It is always wise to double check your Public Liability insurance policy and have a good understanding of what is and isn’t covered. The last thing you need is to be caught out at claim time by not having the right or enough cover in place. 

What is covered? 

  • Compensation for accidental damage to third party property 
  • Compensation for personal injury or death to third parties where the ACC does not provide cover 
  • Legal and defence costs 

What is typically NOT covered? 

  • Injury to your employees 
  • Damage to your own property 
  • Compensation for personal injury whereby cover is provided by the ACC 
  • Known claims and circumstances 


Why do I need Public Liability Insurance?  

While you may take all the care in the world to create a safe environment, the reality is accidents can still happen. Whether you‘re a butcher or an accountant, a Public Liability claim could happen in most occupations.  

As a business owner, not only do you have a responsibility to create a safe working environment but you are also liable for any property damage and personal injury* that may occur to a third party, resulting from your business activities. These are some examples of scenarios where your business may need to consider having Public Liability insurance in place: 

  • It’s a contractual requirement- you may be required to have an active Public Liability insurance policy to work on certain contracts. Be sure to always check what the minimum amount your required to have too 
  • Even if your office is based at home, if you have clients or suppliers that come and visit, you need to consider having some form of protection in place. All it takes is for a client to accidentally trip and injure themselves on your property for a potential claim to occur. 
  • If you are renting a business space it may be a condition of your rental agreement to have a certain level of Public Liability insurance in place 

If a claim were to occur, take a moment to think of the impact it could have not only on your financial position but your reputation too. If you didn’t have Public Liability insurance in place, how would you be able to pay for the related legal costs as well as compensation if a claim was made against your business? 


Types of Public Liability claims  

These are some examples of typical Public Liability claims:  

  • Accidental damage to a third party’s personal property  
  • Personal injury or property damage caused by a faulty or defective product that you have manufactured or sold  
  • Injury or illness due to your negligence that is not covered by the ACC  

What level of Public Liability Insurance do I need?  

BizCover is able to offer four different levels of Public Liability cover, being $1 million, $2 million, $5 million and $10 million.  

Every business is different and has its own unique exposure to risks. The amount and type of cover required will be different for every business but here are some factors to consider:  

  • Any contracts that require your business to hold a minimum level of cover?  
  • Has your industry body set a a minimum level of cover for membership?  
  • The costs associated with third party personal injury or property damage claims like to occur in your industry?   


Could this happen to your business? 

Accidents can happen at any time. Some of our customers can attest to that!! 

Here is a real-life claim example: 

A landscape gardener who was working at a private residence needed to use a garden power tool to complete the required work. Whilst operating the machine he accidentally lost control of it damaging the side of his client’s house. The landscape gardener’s insurer quickly agreed that he was negligent, as the damage arose out of the operation of the insured’s business activity. They settled the claim with the homeowner’s own insurer within one week. Most importantly however, the homeowner has continued to hire the landscape gardener despite the incident as the matter was able to be settled easily and quickly due to the landscape gardener’s Public Liability cover. 

Get your Public Liability insurance sorted 

If getting Public Liability insurance sorted has been on your to-do list, now is the time to get it sorted without the hassles. At BizCover we do all the shopping around for you, so you can compare quotes from selected leading New Zealand insurers and get covered in minutes- no paperwork required. Jump online and get a quote today.  

* This information is a general guide only and does not take into account your objectives, financial situation or needs.  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. 

The provision of the claims examples are for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Cover for a claim will depend on the specific circumstances around the loss and would be subject to the terms and conditions of the policy concerned. 

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