Public Liability Insurance for Small Business

What is Public Liability Insurance?

Written by COVRA · Updated 19 October 2026 · Sources

Business public liability insurance generally covers claims from third parties, such as customers or members of the public, for personal injury or property damage caused by your negligence. It can also cover legal defence costs for a claim. It generally doesn’t cover injuries to your own employees or claims about your advice, which other covers usually handle.

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Who commonly considers it.

Retail & Hospitality Shop owners, cafes, restaurants, bars
Trades & Contractors Electricians, plumbers, builders, landscapers
Professional Services Consultants, accountants, office-based firms
Events & Entertainment Event planners, performers, venue operators

What public liability covers.

Public liability insurance policies vary, but they generally cover these.

Injury to other people Customers, visitors and members of the public, but not your employees². For example, a customer who slips on a wet floor.
Damage to their property Other people’s property that your business damages².
Legal costs The cost of defending a claim².
Property in your care Other people’s property in your care, custody or control, on some policies².

The government’s business.gov.au adds that it may also cover emotional distress and consequential loss¹. Common limits are $5 million, $10 million and $20 million², and policies generally respond to incidents that happen while the policy is in force⁵.

How the public liability limit works.

The Allianz Business Pack PDS is the example; wordings differ.

Per occurrence Limits generally apply per occurrence. In the Allianz wording, compensation from one occurrence can’t exceed the public liability limit, and all injury or damage from one cause counts as one occurrence³⁰, so several people hurt in one incident share it.
Products liability aggregate Products liability usually has an annual total too. Allianz caps its total liability for product claims during any one period of insurance at the products liability limit³⁰.
Defence costs Allianz’s public liability section pays legal costs incurred with its consent in defending a claim in addition to the limit, while the management liability section of the same PDS treats defence costs as part of the limit³⁰.
The policy in force at the time Public liability is occurrence-based: Allianz covers injury or damage happening during the period of insurance³⁰. So the limit that applies is the one in force when the injury or damage happened, not when the claim is made.
Who sets the figure A licence, contract or lease sets the minimum: at least $5 million for Queensland electrical contractors¹², $10 million by default in NSW Government contracts²⁰, or what the lease specifies²². See what the insurance clause in a contract means.

Public liability responds to negligence. Legal Aid WA describes it as owing someone a duty of care, breaching that duty, and that person suffering injury, loss or damage as a result; everyone has a duty to take reasonable care not to cause foreseeable harm to others or their property³³. Its example: a shopper slips on a wet floor and breaks an arm³³.

What public liability doesn’t cover.

Other covers pick these up.

Injured employees Workers’ compensation, which most employers must hold. Sole traders generally aren’t covered by it themselves and need private personal cover¹.
Advice and professional services Professional indemnity covers claims that your advice or services caused a loss. It’s mandatory for some professions¹. See public liability vs professional indemnity.
Goods you make, sell or supply Products liability covers injury or damage your goods cause, even through a repair or service. Insurers often combine it with public liability as “public and products liability”^{1, 4}. See who needs product liability insurance.

A building industry broker gives this example: a beam falls on someone during construction, which is public liability. The finished deck collapses months after handover, which is products liability⁵.

Costs

How much does public liability insurance cost?

Two online brokers publish figures from their own customers. They differ, because the customers and periods differ, so both are shown: a guide, not a quote.

Typical, all customers $605 a year

Within $370 to $840. upcover, 2022 to 2026.⁸

Low-risk sole traders From $220

A year, and typically $426 to $568. upcover, 2022 to 2026.⁸

Average, all customers $39 a month

About $468 a year, our sum. BizCover, July 2023 to June 2024.⁶

Sole-trader tradies, NSW $50 a month

Average, older data. BizCover, 2021/22.⁷

Typical price per year by industry, including GST, duty and fees (upcover, policies 2022 to 2026)⁸:

Hospitality

About $465 a year

Retail

About $470 a year

Professional services

About $568 a year

Trades and construction

About $598 a year

Cleaning

About $759 a year

Beauty

About $1,008 a year

Automotive

About $1,497 a year

BizCover’s monthly averages for 2023/24 range from $37 for consultants to $68 for wholesale businesses⁶.

Price by insurance cover limit.

upcover’s 2026 examples for two trades at each limit, with older BizCover data for NSW tradies (2021/22) behind them.

$5 million

$180 to $439 a year⁸

upcover’s examples for a handyman and an electrician. Older BizCover data for NSW tradies (2021/22): $44 a month⁷.

$10 million

$240 to $508 a year⁸

upcover’s examples for a handyman and an electrician. Older BizCover data for NSW tradies (2021/22): $55 a month⁷.

$20 million

$300 to $577 a year⁸

upcover’s examples for a handyman and an electrician. Older BizCover data for NSW tradies (2021/22): $84 a month⁷.

What affects the price for your business.

What insurers commonly look at.

What your business does

Your occupation, and the work your business does^{6, 8}.

Business size

Turnover, staff and subcontractors^{6, 8}.

Limit and excess

APRA found small businesses that chose higher excesses saw smaller premium rises⁹.

Claims history

Past claims against your business^{6, 8}.

Location

Including state duty on the premium, which ranges from 0% to 11%⁶.

Managing risk

How your business manages its risks⁸.

Prices rose for years: APRA found the average public and products liability premium rose 40% between 2015 and 2021⁹, and in 2021 the Insurance Council of Australia estimated public liability prices had risen 20% to 30% since about 2017¹⁰. Since 2025 many business premiums have eased: see why business insurance goes up. In NSW, small businesses with aggregated turnover under $2 million don’t pay insurance duty on public and product liability insurance issued or renewed from 1 January 2018. The exemption needs a small business declaration to the insurer or broker before the policy starts or renews, and one declaration covers the whole income year¹¹.

When a licence requires public liability.

For most businesses, public liability insurance isn’t compulsory. These licences need it.

Queensland electrical contractors Public and products liability of at least $5 million, plus consumer protection insurance of at least $50,000¹².
Victorian electrical contractors Public liability of at least $5 million¹³.
Victorian licensed plumbers Public liability of at least $5 million, shown with a certificate of currency before the licence is issued¹⁴.
WA electrical contractors A certificate of currency for public liability, issued within the last 30 days. No minimum amount is published¹⁵.
NSW security businesses At least $10 million for a master licence if the work involves firearms, horses or dogs¹⁶.

We found no public liability requirement for NSW building and trade licences¹⁷, Queensland QBCC licences³⁴, or South Australian plumbing, gas and electrical contractor licences¹⁹. Most building contracts still ask for it¹⁸. Those licences have other insurance rules, such as home building compensation cover in NSW and the Queensland Home Warranty Scheme.

When a contract asks for public liability.

Clients, venues and landlords often ask for public liability insurance, and set the limit. Our guide to how much public liability cover you need lists the figures councils, governments and licences publish.

NSW Government contracts $10 million by default, plus $10 million of product liability if required²⁰. Policy says agencies should ask SMEs for the minimum possible cover²¹. In 2022, the NSW Small Business Commission reported some agencies still asked for $20 million¹⁰.
Leases A retail or commercial lease can require the tenant to hold certain insurance²².
Tenders and business contracts A certificate of currency, which shows your cover is current²³. Contracts and leases also use terms such as principal’s indemnity and cross liability: see what the insurance clause in a contract means.

Common public liability exclusions.

Every policy lists its exclusions in its product disclosure statement (PDS). These are common examples from Allianz and BizCover. See what public liability doesn’t cover.

Your employeesInjured employees are covered by workers’ compensation instead^{2, 24}.
Your own propertyIncluding your own tools and equipment².
Professional adviceProfessional indemnity covers it^{2, 24}.
Faulty workThe cost of fixing your own faulty work, and product recalls^{2, 24}.
Contract liabilityLiability you agree to take on in a contract^{2, 24}.
Fines and penaltiesIncluding punitive damages^{2, 24}.
Deliberate actsHarm you mean to cause, or cause recklessly, and dishonest, fraudulent, criminal or malicious acts by you or with your consent³⁰.
Asbestos and pollutionAsbestos, and pollution that happens gradually^{2, 24}.
Drones and aircraftDrones, and aircraft products^{2, 24}.

Real public liability claims in Australia.

BizCover publishes claims it has paid for its customers. They range from about $1,000 to over $1 million.

Steel fabricatorMachinery hit a pedestrian on the footpath, injuring their ankle. Paid over $1.3 million in defence costs and compensation²⁶.
Graphic design studioA client tripped on a dip in the floor, fracturing a bone and damaging ligaments. Paid $105,000: $75,000 in compensation and $30,000 in defence costs²⁵.
PainterA window protection product permanently stained a client’s windows. Paid $27,000²⁴.
BeauticianA client was burnt during waxing. Paid $7,786²⁶.
ConcreterThe site fence blew onto a car. Paid $6,045²⁷.
Roof tilerWater got into a client’s switchboard. Paid $3,205²⁷.
ElectricianA client’s splashback was damaged. Paid $1,425²⁶.

Across Australia, from APRA’s analysis of public liability claims, published May 2023⁹:

Claims finalised in 2021

26,583

6,699 of them paid nothing.

Average cost

About $39,000

Per finalised claim, our calculation from $1,036 million in total.

Injury claims

5.5% a year

Growth in the average bodily injury claim from 2013.

FAQ

Common questions.

Is public liability insurance compulsory in Australia?

Not for most businesses. Some licences require it, such as for electrical contractors in Queensland and Victoria, and many contracts, venues and leases ask for it.

Is public liability insurance compulsory in NSW and Queensland?

Not for most businesses. Some licences require it: at least $5 million for Queensland electrical contractors, and $10 million for NSW security master licences involving firearms, horses or dogs. NSW Government contracts ask for $10 million by default.

Do sole traders need public liability insurance?

Public liability insurance for sole traders isn’t generally required by law. A licence, contract or venue can still require it.

Do I need an ABN to get public liability insurance?

No law says you need an ABN to buy public liability insurance. You’re entitled to an ABN if you run or are starting a business or other enterprise. Ask the broker or insurer what they need from you.

How much is public liability insurance for a sole trader?

upcover puts low-risk work from about $220 a year, and typically $426 to $568, from policies arranged between 2022 and 2026. Older BizCover data for NSW sole-trader tradies (2021/22) showed about $50 a month on average.

What cover limits are common?

$5 million, $10 million and $20 million. A licence or contract often sets the minimum: $5 million for Queensland electrical contractors and $10 million by default in NSW Government contracts. In 2022, the NSW Small Business Commission reported some agencies still asked for $20 million.

How much is $20 million public liability insurance?

upcover’s examples are $300 a year for a handyman and $577 for an electrician. Older BizCover data for NSW tradies (2021/22) showed $84 a month on average for a $20 million limit.

What’s the difference between public liability and professional indemnity?

Public liability covers injury to other people and damage to their property. Professional indemnity covers claims that your advice or professional services caused someone a financial loss.

What’s the difference between public and products liability?

Public liability covers incidents that happen while you work. Products liability covers injury or damage caused by goods you make, supply or distribute. Insurers often combine them.

Does public liability cover my employees?

No. Injured employees are covered by workers’ compensation.

Does it cover my own tools and equipment?

No. It covers other people’s property, not your own.

Is public liability insurance tax-deductible?

The ATO lists public risk insurance premiums as a deductible business expense. An accountant can explain how that applies to you.

Does my home insurance cover a business I run from home?

Only partly. Allianz’s home and contents policy, for example, covers some business activity, with limits such as $5,000 for business equipment.

What’s a certificate of currency?

Proof from your insurer that your policy is current. Tenders and contracts often ask for one.

Is there stamp duty on public liability insurance in NSW?

Small businesses with aggregated turnover under $2 million don’t pay NSW insurance duty on public and product liability. The exemption needs a small business declaration to the insurer or broker before the policy starts or renews, and one declaration covers the whole income year.

Can I get a public liability insurance quote through COVRA?

Yes, from the broker. COVRA passes your enquiry to one licensed or authorised broker, who can get quotes from insurers for you. COVRA doesn’t quote or sell insurance itself.

Still have a question? A broker can talk it through with you.

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Why businesses use Covra.

One enquiry, one broker.

Not sure what cover you need

Talk it through with a licensed or authorised insurance broker, who can look at your business and your options.

Don’t want lots of calls

COVRA sends your contact details to one broker, not several.

No obligation

You don’t have to take out a policy.

Need it sorted properly

Public Liability Insurance can be complex; discuss your insurance needs with a licensed or authorised broker.

Approved brokers on COVRA.

Licence and covers checked

Before a brokerage can receive enquiries, we check on ASIC’s professional register that it holds, or acts under, an Australian Financial Services Licence that covers general insurance, and check its website for the covers it offers.