What does Public Liability Insurance Cover?


What does Public Liability Insurance cover?

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.

Public Liability insurance protects your business by providing compensation for property damage and personal injury or death in circumstances not covered by the Accident Compensation Commission (ACC).

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.

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.

Public Liability commonly covers:

  • The costs to repair or replace damaged property
  • Compensation for personal injury or death to third parties where the ACC does not provide cover
  • Legal and defence costs

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


The policy also commonly covers the cost of rectification of faulty workmanship up to $100,000.

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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 spaces always have potential liability to their landlords and landlords will often insist on public liability cover being in place.

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

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.

Public Liability policies will NOT cover:

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

* 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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