Public Liability Insurance

Covers your legal liability to pay compensation for damage to someone else's property, or for personal injury to someone (other than your employees), including your defence costs.

Why would I need Public Liability Insurance?

Where a business owner causes an accident, they may find themselves having to pay compensation to members of the public for accidental loss to property or injury. Public Liability litigation is expensive, even if settled out of court, with the average cost of defending a claim running into the thousands. Liability in respect of motor vehicle accidents is under the Commercial Vehicles cover. 

Public Liability icon


What does this mean for your industry?

What's covered?

  • Legal liability to pay compensation to someone as a result of something that happened while you were carrying out your business
  • Compensation for court appearance if called as a witness for a claim under this cover
  • Liability caused by mechanical plant or machinery
  • Liability for damage to employees' personal effects
  • Liability for property in your care, custody or control
  • Reparations for injuries other than under the Health and Safety at Work Act
  • Liability for product recall if products you supply result in a claim
  • Compensation for damage caused by defective workmanship (if optional cover chosen)
  • Liability as a tenant for damage to your landlord's premises
  • Liability for defamation or invasion of right of privacy

What's not covered?

  • Liability for failure of design or materials, leading to building defects, water penetration, and/or mould
  • Liability for damage caused by defective work (unless optional cover chosen)
  • Liability for damage caused by dishonest, fraudulent or criminal intent
  • Liability for intentional or reckless acts or omissions
  • Liability for damage caused by pollutants, unless from an identifiable, sudden, accidental and unexpected release
  • Compensation for product repair or replacement
  • Liability for fines or damages
  • Liability for damage to underground services, unless you first tried to locate them
  • Compensation for loss of use of property that hasn't been damaged because of a delay in your contract
  • Liability you've assumed under an agreement, where liability wouldn't normally have applied

These lists highlight some of the inclusions and exclusions in this policy. For full details of all inclusions and exclusions, see the policy document.

Public Liability Insurance in action

Buildings on fire



Michael was preparing some steel trusses in his workshop when a spark from the grinder caused a fire. The fire spread to the mechanic's workshop next door, which belonged to a different owner. The mechanic lost his plant and tools, and wasn't able to earn for several weeks. Michael faced claims from his landlord, the owner of the neighbouring building, the mechanic, and a customer of the mechanic whose car was fire damaged. Michael's Public Liability policy helped resolve a complicated situation and settle the eligible claims.

A dotted line cutout of a vacuum cleaner in a workshop, showing its absence


Appliance Repairer

Adrian took a customer' s vacuum cleaner back to his workshop to repair it. It was a busy day, with a number of customers and couriers passing through to pick up items. By the time the owner arrived, the vacuum cleaner had gone missing from the front counter. The customer had needed it for her cleaning job, so she made a claim for both its replacement and the resulting loss of income. Under the Care, Custody and Control extension of Adrian's Public Liability Insurance, AA Small Business negotiated a settlement with the customer and her insurer.

Pooled water on the bathroom floor from leaking pipes


Justice of the Peace

Jhumpa attempted to perform some DIY repairs in her office bathroom, but accidentally created a leak that damaged the ceiling of the office downstairs. Her Public Liability Insurance covered the damage to the downstairs neighbours' premises, but not the faulty work itself, meaning Jhumpa had to fix the cause of the leak.

These fictional scenarios were created to illustrate the benefits of Public Liability Insurance. All claims are subject to the terms and conditions in the policy document.

Let's get things sorted

Speak to a Small Business Insurance Consultant

Call us on 0800 500 231