Public and Product Liability insurance 

Public and Product Liability in Australia is crucial for businesses of all sizes, protecting them from financial losses due to claims of personal injury or property damage to third parties caused by their business activities or products.

Average Premiums

The cost of public and product liability insurance in Australia varies significantly based on numerous factors. However, for small businesses, you can expect an average monthly premium of around $63.53. This translates to an annual cost for small businesses typically ranging from $500 to $1,500.

Here’s a breakdown of factors influencing premiums:

• Type of Business & Industry: Higher-risk industries (e.g., construction, manufacturing, hospitality with frequent foot traffic, medical services) generally face higher premiums than lower-risk, office-based businesses (e.g., consulting, real estate).
• Business Size & Turnover: Larger businesses with more employees, higher revenue, and greater customer interaction typically incur higher costs due to increased risk exposure.
• Level of Coverage: Policies commonly offer limits ranging from $5 million to $20 million. Higher coverage limits will result in higher premiums, but not always proportionally.
• Claims History: Businesses with a history of claims will likely pay higher premiums.
• Location: Stamp duty on insurance premiums varies by state and territory (0% to 11%), impacting the overall cost. Additionally, areas with higher crime rates or natural disaster risks might also influence premiums.
• Products/Services Offered: The nature and risk level of the products or services your business provides are a major determinant.
• Contractual Obligations: Some clients, partners, or suppliers may require specific liability coverage levels, influencing the policy you need.
• Risk Management Procedures: Businesses with robust risk management practices might receive more favourable premiums.
• Policy Excess (Deductible): Opting for a larger excess can reduce the premium, as it means the business takes on more initial risk.

Typical Coverage

Public and Product Liability insurance policies typically cover:

• Personal Injury: This covers claims for medical costs, damages, and legal fees if a third party (e.g., a customer, client, or member of the public) suffers an injury or illness due to your business activities or products. Examples include: 
  • A customer slipping and falling on your premises.
  • Food served by your catering business making someone sick.
  • Injury caused by an employee’s negligence.
• Property Damage: This covers claims for physical loss, destruction, or damage to a third party’s tangible property caused by your business operations or products. Examples include: 
  • An unsecured ladder falling and damaging a customer’s car during construction work.
  • A faulty product you sold causing damage to a third party’s home.
• Advertising Liability: Some policies may extend to cover claims for issues like defamation, copyright infringement, invasion of privacy, misleading advertising, or unfair competition arising from your business’s advertising efforts.
• Legal Costs: A crucial component of these policies is the coverage for legal expenses incurred in investigating, defending, and settling claims made against your business, regardless of whether your business is found at fault. This includes legal fees and reasonable expenses.
• Consequential Loss: In some cases, it may cover financial losses a third party incurs as a direct result of the injury or property damage caused by your business’s negligence.

What is generally NOT covered:

• Intentional Damage or Injury: Deliberate acts of wrongdoing or criminal acts by the business or its employees.
• Professional Advice or Services: This is typically covered by Professional Indemnity insurance, not Public and Product Liability.
• Employee Injuries: These are covered by Workers’ Compensation insurance.
• Damage to Your Own Property: This is usually covered by property insurance.
• Faulty Workmanship: While damage caused by faulty workmanship might be covered, the cost of rectifying the faulty workmanship itself is usually excluded.
• Asbestos-related Claims: Liabilities arising from asbestos or materials containing asbestos are often excluded.
• Product Recalls: The direct costs associated with recalling a product are typically excluded, though some policies may offer this as an optional extension.
• Punitive Damages: Damages awarded by a court beyond compensation, intended as punishment.
• Cyber Attacks: Costs related to cybercrime are covered by Cyber Liability insurance.

It’s important for businesses to assess their specific risks and consult with an insurance broker to ensure they have the appropriate coverage and limits for their unique operations.