What does Public Liability Insurance Cover?

No matter how big or small your business is, accidents can and do happen. Public Liability insurance* provides peace of mind for claims for third party property damage or personal injury. If you deal with people in any capacity from clients to suppliers and members of the public, then Public Liability insurance is an important form of protection worth considering.  

 Public Liability insurance is designed to provide protection for you and your business in the event a customer, supplier or a member of the public are injured (and not covered by the Accident Compensation Commission (ACC)) or sustain property damage as a result of your negligent business activities. 

The ACC looks after most of the exposure in NZ for accidental personal injury, however it doesn’t provide protection for businesses that export their products. It also doesn’t cover claims for food poisoning, an area which food and hospitality businesses need protection in. 

Product Liability insurance protects your business against claims by third parties relating to property damage or personal injury (not covered by the Accident Compensation Commission (ACC)) caused by your products. This is usually part of your Public Liability insurance policy. 


The purpose of Public Liability insurance is to give your business protection against unwanted and unforeseen risks. While you may not be found negligent of the allegation or claim, the related legal and defence costs could be enough to potentially put you out of business for good. 

Claims could potentially occur to an array of different types of businesses from tradies to retailers, accountants and personal trainers. Let’s take a look at what is typically covered and excluded from a Public Liability insurance policy. 


Public Liability typically provides cover for:* 

  • The costs to repair or replace damaged property- for example, if you were renovating a client’s property and accidentally knocked down the wrong wall in their house. 
  • Compensation for personal injury or death to third parties where the ACC does not provide cover. We’ve included some examples below of the types of injuries that are covered and not covered by the ACC. 
  • Legal and defence costs- A claim could take some time to be resolved through the legal system, and the related costs can quickly add up and impact your business’ financial situation. 


What is typically NOT covered by Public Liability insurance

While Public Liability insurance covers your business for claims of negligence, you still need to take responsibility and ensure your business operates in a professional manner. Taking the extra steps to create a safe and secure worksite is something which you will be thankful for in the long run. 


Public Liability policies will NOT cover: 

  • Injury to your employees 
  • Damage to your own property 
  • Compensation for personal injury when covered by the ACC 
  • Known claims and circumstances 

Examples of some of the kind of injuries the ACC may cover 

The ACC provides cover for certain claims relating to the workplace and these are some examples: 

  • sprains or strains – such as the ankle, back, knee or shoulder sprains
  • wounds – cut, broken or bruised skin
  • burns
  • fractures
  • dislocations
  • dental injuries
  • hearing loss
  • concussion and loss of consciousness.

The ACC may also cover most physical injuries if they’re caused by: 

  • an accident
  • sexual violence

They may also cover injuries or conditions that happen over time and are caused by the type of work you do. This is known as gradual process conditions. The ACC will need to establish if your work tasks or workplace environment are causing your condition. i 

Examples of some of the injuries that are not covered by the ACC 


When injuries are not caused by an accident, the ACC will typically not provide cover for:* 


  • illness, sickness, or contagious diseases,egmeasles 
  • stress, hurt feelings or other emotional issues. This is unless they’re linked to an injury we already cover
  • conditions related to ageing,egarthritis 
  • most hernias
  • injuries that happen over time, unless an activity at work is causing it
  • damage to items that don’t replace body parts. This includes hearing aids, glasses,pacemakersand gastric bands.ii 


When would I need Public Liability insurance? 

Public Liability insurance is designed to protect businesses from the financial impact of claims made against you. While there are many situations in which a Public Liability policy operate, these are some of the common reasons why someone may make a claim: 

  • Damage to a third-party’s property 
  • Financial loss as a result of damage to property 
  • Financial loss as a result of damage caused by a faulty or defective product that you have manufactured or sold 
  • Inappropriate installation of equipment causing damage to property 
  • Injury, illness or death caused by your negligence that is not covered by the ACC 

 For some businesses, Public Liability insurance may be a requirement. For example for some tradies they may have to have a certain level of Public Liability coverage in place before they even step on site to start work. Public Liability insurance is commonly a requirement for professionals that work on contracts too, especially within the government sector. 

Retail businesses are also often required to have Public Liability insurance as part of their rental agreement with their landlord. 


What could cause a claim? 

Sometimes damage can occur instantly, while others may take time for the damage to manifest. Either way, a claim could have a devastating impact on your financial situation. Having the right Public Liability insurance in place is vital for helping you stay in business for the long run. 

Different types of claims will occur in different types of businesses. For example cafes and retail stores are exposed to the potential risk of accidentally spilling food or drinks on a customer, or a member of the public tripping over a misplaced item of stock. 

Trade businesses have the potential to cause damage to property when carrying out works, like accidentally spilling paint all over the carpet. This is where cover for rectification of faulty workmanship can assist. 


Get your Public Liability insurance sorted today 

At BizCover, we understand how busy life can get as a small business owner, and that’s why we make getting your insurance sorted simple with no dramas. Jump onto our online platform, enter some details about your business then receive multiple quotes to compare from selected leading New Zealand insurers. 

Get covered in minutes, with your policy documents sent straight to your inbox, no paperwork required. Experience insurance made easy today with BizCover.  


* 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. 

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