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Public liability

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Public Liability Cover

Public liability insurance (otherwise known as General liability) in New Zealand protects you against claims made by third parties for injury or property damage caused by your business activities. This coverage is essential for safeguarding your business from legal liability risks, ensuring you are financially covered in case of legal liability arising from accidents or incidents.

Why is public liability insurance important? 

Public liability protects you against the most common risks of running a business, including incidents on your business premises where the legal liability of business owners for property damage and personal injury is a significant concern.

As a fundamental type of business liability insurance, public liability insurance covers the cost of legal and compensation fees for incidents like a customer tripping and injuring themselves at your storefront or if your business operations accidentally damage someone’s property. It ensures the ability to pay compensation for unintended and unexpected personal injury and property damage arising from products or services, and it also covers any legal defence costs incurred as a result of defending against claims.

Businesses owners may need public liability insurance for numerous reasons. For instance, some contracts or landlords may require you to produce a public liability certificate of insurance.

It is necessary component of your business risk management, its affordability makes it a wise investment. In New Zealand, the average cost of public liability insurance typically ranges between NZ$40 – NZ$70 per month.

It’s crucial to have general liability coverage if your business:

  • Has premise accessible to the general public

  • Interacts with clients or customers

  • Deals with customer property

  • Rents or owns a commercial building

  • Sells, supplies, or manufactures products

What does it protect against? 

Public liability provides essential protection for businesses against legal and compensation costs that arise from unexpected events. It’s designed to cover your business if a member of the public or a customer suffers an unexpected personal injury or property damage.

The coverage your commercial public liability policy provides:

Third party property damage

If your business activities inadvertently cause damage to a third party's property, public liability insurance can cover the costs. For instance, if you operate a construction business and accidentally damage a client's driveway, your policy can cover the costs of repairs or replacement.

Third party injury

Public liability also covers costs if someone is injured because of your business operations. This can range from a customer slipping on a wet floor in your restaurant to a bystander being hurt by falling construction material from your site.

Products liability

Your pl insurance can also cover you in case of a products liability claim. This is becuase it typically includes products liability insurance.If a product you have sold, supplied, or manufactured causes harm or injury to a consumer or damages their property, insurance can help cover the compensation costs. For example, if a customer becomes ill from using a product that you've sold, or if a faulty appliance starts a fire, your public liability insurance can cover the legal costs and any compensation payouts.

How much does public liability insurance cost?

Public liability insurance premiums are calculated on several different factors including:

  • Limit of cover
  • Type of industry
  • Location 
  • Turnover 

Public liability insurance NZ typically costs between $40 to $70 per month. 

Who needs public liability Insurance NZ?

Public liability is crucial for any business in New Zealand that interacts with the public, including customers, suppliers, or even passers-by. From retail stores and restaurants to tradesmen and professional services, these businesses are exposed to potential claims for property damage or personal injury caused by their operations. As the leading online insurance broker, we take pride in offering comprehensive public liability insurance, supporting a wide range of businesses, especially small businesses, in managing these risks effectively.

Even small accidents, like a customer slipping on a wet floor or damage to a client’s property, can result in significant financial consequences without adequate cover. Therefore most business owners purchase public liability insurance.

Absolutely, subcontractors in New Zealand should consider securing pl insurance as an integral aspect of their operational management. Why so? This is primarily because many head contractors and businesses, while they may have policies that extend coverage to subcontractors, typically seek to recover costs from these subcontractors in case of any claims. This clause often forms part of the contract between the main contractor and the subcontractor, adding a layer of financial security for the primary contractor.

Public liability is crucial in managing the risks associated with unexpected events that may occur in the course of a subcontractor’s operations. These can range from personal injuries to third-party property damage. Without this coverage, a subcontractor can find themselves facing substantial out-of-pocket expenses in the event of a liability claim.

In instances where head contractors’ insurance policies do extend to cover subcontractors, it’s important to understand the specifics of this coverage. Subcontractors should know that this cover is usually secondary and the head contractor’s insurer, following a claim, will often seek recovery of any payout from the subcontractor’s own insurer. This process is known as “subrogation.”

This potential liability underscores the importance of subcontractors maintaining their own public liability insurance coverage. Not only can this insurance provide peace of mind, but it also strengthens the subcontractor’s professional standing and demonstrates their commitment to financial responsibility. Plus, having their own coverage ensures they are directly involved in the management and resolution of any claims that may arise.

Absolutely, subcontractors in New Zealand should consider securing pl insurance as an integral aspect of their operational management. Why so? This is primarily because many head contractors and businesses, while they may have policies that extend coverage to subcontractors, typically seek to recover costs from these subcontractors in case of any claims. This clause often forms part of the contract between the main contractor and the subcontractor, adding a layer of financial security for the primary contractor.

Public liability is crucial in managing the risks associated with unexpected events that may occur in the course of a subcontractor’s operations. These can range from personal injuries to third-party property damage. Without this coverage, a subcontractor can find themselves facing substantial out-of-pocket expenses in the event of a liability claim.

In instances where head contractors’ insurance policies do extend to cover subcontractors, it’s important to understand the specifics of this coverage. Subcontractors should know that this cover is usually secondary and the head contractor’s insurer, following a claim, will often seek recovery of any payout from the subcontractor’s own insurer. This process is known as “subrogation.”

This potential liability underscores the importance of subcontractors maintaining their own public liability insurance coverage. Not only can this insurance provide peace of mind, but it also strengthens the subcontractor’s professional standing and demonstrates their commitment to financial responsibility. Plus, having their own coverage ensures they are directly involved in the management and resolution of any claims that may arise.

Top professions that need public liability

In New Zealand, this is a critical safeguard for many professions, protecting them against claims for damages caused by their business activities.

How do I get proof of public liability insurance

You can usually get proof of insurance same day when you purchase insurance through Gerrards.

Acquiring a public liability insurance certificate from traditional insurance brokers may require a few weeks, a delay that could create problems for policyholders who need instant insurance proof for an imminent contract or lease.

To obtain insurance coverage promptly, contact us. We may require you to provide some fundamental details about your business, such as:

  • The name of your business
  • The nature of your business activities
  • The total number of employees
  • Predicted annual income
  • Years of experience in the industry

What does public liability insurance not cover?

PL is critical policy to protect yourselves from the financial burden of legal claims made by third parties for injury or damage. However, it’s important to understand that this type of insurance does not cover everything. There are certain key areas where Public Liability may not provide coverage. To ensure you’re fully informed, it’s advisable to compare public liability insurance policies to understand their exclusions and limitations.

Professional Errors

Public Liability Insurance does not extend to cover losses that occur as a result of professional errors or omissions. These mistakes could include giving incorrect advice, making a mistake in a piece of work, or neglecting a critical duty. For these circumstances, professionals such as consultants, accountants, architects, and others might need to consider Professional Indemnity Insurance, which is designed to cover the costs associated with defending or settling claims of this nature.

Damage to Owned Property

Public Liability primarily covers the damage caused to third party property. Any damage to your own business property, whether it’s physical assets like office equipment, buildings, or inventory, is not covered. This is where a Commercial Property Insurance policy would be necessary, which protects your owned buildings against loss or damage.

Vehicle Liability

While Public Liability covers a variety of risks, it does not cover incidents involving vehicles. If a business vehicle causes injury or property damage, this would typically fall under a Commercial Vehicle Insurance policy. Additionally, if the vehicle itself is damaged, a policy holder would need to turn to their Comprehensive or Collision vehicle insurance.

Employment Disputes

If a current or former employee brings a legal claim against the business due to perceived unfair treatment, discrimination, wrongful termination, or other employment disputes, Public Liability will not cover these situations. To protect against such claims, ses you need to consider acquiring Employment Disputes Insurance.

Employee Injuries

Injuries that employees may sustain while at work are typically not covered by Public Liability Insurance. This is because such instances are usually handled by ACC or employers liability.

Other common questions about general liability insurance

The you need depends on the nature and size of your business and the level of risk it carries. Businesses that interact with the public frequently or engage in high-risk activities usually need more coverage. In New Zealand, the minimum level is typically $1 million with limits extending up to $10 million or more. However, it is advisable to assess your potential risk and consult with an insurance expert to determine the most suitable amount of cover for your specific situation. Consulting with a business insurance provider is crucial for obtaining tailored policy recommendations.

Public liability in New Zealand typically covers incidents that occur within the country. However, some policies can offer worldwide coverage excluding the USA and Canada by default. If you require cover for the USA & Canada you will need to request this and expect to pay much higher premiums due to their complex and litigious legal systems which typically results in much higher liability claims. It is essential to carefully review your policy terms and policy wording or speak with your insurance company or broker to understand the geographical scope of your coverage. If your business operates or services clients internationally, you will need to consider a policy that includes international coverage.

While both types of insurance aim to protect your business, they cover different types of risk. Public liability covers the cost of legal action and compensation claims made against your business if a third party (a member of the public) is injured or they have damaged property due to your business operations.

On the other hand, professional indemnity is designed to protect professionals who provide advice or services to their clients. It covers legal costs and damages awarded to a client if they sue you for a mistake you’ve made in the course of your professional duty, such as giving incorrect advice or making a professional oversight.

A public liability insurance exclusion is a specific situation, condition, or activity that your public liability insurance policy does not cover. These can include accidents caused by poor workmanship, intentional damage, contractual liability, or incidents occurring in excluded locations, among others. Exclusions vary between insurance providers and individual policies, so it’s crucial to read your policy document thoroughly and understand what is and isn’t covered.

To learn more, you are welcome to talk to one of our experts. They can guide you through the ins and outs of public liability insurance, help you understand your business needs, and assist you in making informed decisions about your insurance cover. Please get in touch with us through our contact page, or schedule a call at a time that suits you.

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