Do I need public liability insurance?

Public Liability Insurance is one of the most common business insurance questions online, and for good reason. Many business owners, freelancers, contractors, and self-employed professionals want to know whether it’s required, what it covers, and whether the cost is worth it.

If you’ve ever asked yourself, “Do I actually need public liability insurance?” — this guide breaks it down in simple terms so you can make an informed decision.

What Is Public Liability Insurance?

Public Liability Insurance protects you if:

• Someone is injured

• Someone’s property is damaged

• as a result of your business activities

  
  

It can cover compensation claims, legal costs, and expenses involved in defending or settling claims.

Who Needs Public Liability Insurance?

You likely need public liability insurance if:

1. You deal with customers, clients, or the public

This includes:

• salons

• cafés

• shops

• gyms

• event organizers

• photographers

• consultants

If people enter your workplace or you visit theirs, there’s risk.

2. You work on client sites

For example:

• tradies

• contractors

• engineers

• cleaners

• landscapers

Accidental damage or injury on-site is a common risk.

3. You participate in markets, trade shows, or events

Many event organizers require proof of public liability before you can participate.

4. You work in shared office spaces

Even if you don’t own the building, you may still be responsible for damages you cause.

Do Home-Based Businesses Need Public Liability Insurance?

Yes, in many cases they do.

Just because you operate from home doesn’t mean risk disappears. Consider:

• clients visiting your house

• deliveries or pickups

• equipment or stock stored at home

If someone trips or their property is damaged, you could be liable.

Also, home insurance typically does not cover business-related accidents.

When Is Public Liability Insurance Mandatory?

It may be required when:

• signing contracts

• working with government agencies

• joining certain industry associations

• subcontracting under a larger company

• participating in events or exhibitions

• operating under licensing requirements (varies by industry)

Many clients won’t work with you unless you show proof of coverage.

What Happens If You Don’t Have Public Liability Insurance?

Here are some real risks:

• You may have to pay out-of-pocket compensation

• Legal fees can be extremely costly

• Business disruption or financial strain

• Reputational damage if a claim goes public

• You might lose contracts or opportunities

Even a minor injury can escalate quickly into thousands of dollars.

What Public Liability Insurance Covers

Typically includes:

• third-party injury

• third-party property damage

• legal costs to defend a claim

• compensation or settlement amounts

What It Doesn’t Cover

Important to know:

• injuries to employees

• damage to your own property

• professional negligence (that’s separate: Professional Indemnity Insurance)

• faulty workmanship (varies)

• contractual disputes

How Much Public Liability Coverage Do You Need?

Common limits:

• $5 million

• $10 million

• $20 million

What you need depends on:

• contract requirements

• industry standards

• risk exposure

• business size

• whether you work with government or commercial clients

High-risk industries often need $20 million.

Should You Get Public Liability Insurance?

Here’s a simple rule:

If your work involves people, property, or public spaces, you likely need it.

If you’re unsure, a broker can help assess your risk realistically, not just based on guesswork.

Why Work with an Insurance Broker?

A broker can:

• help you choose the right limit

• compare multiple policies

• explain fine print in plain language

• check exclusions

• find a cover suited to your industry

• support you during claims

• prevent underinsurance or accidental gaps

Final Thoughts

Public liability insurance isn’t just a formality; it’s an essential protection for many businesses, contractors, and self-employed operators.

Without it, you risk financial loss, legal battles, and missed opportunities.

If you want clarity on whether your business needs public liability insurance, or the right level of cover, Ferguson Brown can help assess your risks and find the most suitable option.

✅ Learn more at www.fergusonbrown.com.au