Public Liability insurance covers third-party injury or property damage linked to your business operations or premises.
Product Liability insurance covers claims where products you sell, supply or manufacture cause third-party injury or property damage.
These risks can arise from accidents, unsafe premises, faulty products, unclear instructions or everyday business activities.
Businesses that meet clients, visit sites, lease premises or sell products may need this cover.
Before choosing a policy, check cover limits, exclusions, excess, contract requirements and whether both covers are included.
When your business interacts with customers, clients or the public, you carry a level of responsibility for what happens during those interactions.
Imagine your client visited your premises for a meeting, tripped over an unmanaged cord, fell and injured their wrist. Or perhaps you sell a product, such as a yoga mat, and it tears during normal use, causing the customer to fall and sustain an injury. In both cases, your business can be held accountable.
A variety of similar scenarios can lead to legal costs, compensation claims and business disruption. Regardless of whether the incident was accidental, partly caused by someone else or due to customers’ mishandling of products, your business can still face allegations and may need to defend a claim.
In this blog, we cover the ins and outs of Public and Product Liability insurance.
What Is Public and Product Liability Insurance?
In simple terms, Public Liability insurance covers third-party injury and third-party property damage risks linked to your business activities. It responds to claims in which a third party suffers injury or property damage due to your business operations. This may include incidents at your location, on a client’s property or in public spaces.
Product Liability insurance is different but closely related. It covers claims arising from products your business sells, supplies, manufactures, installs, repairs or distributes. If a product causes physical injury or property damage after it has been supplied, Product Liability insurance responds to those claims.
These two covers are often discussed together because many businesses face both operational and product-related risks. They may be available individually or as a bundled policy. A bundled policy can be practical because it helps address both sides of liability risk under one insurance arrangement. Instead of managing separate covers, a bundled policy can give businesses a simpler way to manage common third-party injury and property damage risks.
A third party may allege that your premises, work, equipment, staff, products or instructions caused injury or damage. Even if you disagree with the claim, defending it can still cost money.
What Does Product and Public Liability Insurance Cover?
Public and Product Liability insurance generally covers third-party injury and third-party property damage claims linked to your business operations or products. The exact cover depends on your insurer, policy wording, limits and exclusions.
Third-party bodily injury: Covers claims if someone is injured at your premises, during your work or because of products you sell or supply.
Third-party property damage: Covers damage caused to someone else’s property through your business activities, on-site work, equipment, staff or supplied products.
Legal defence costs: Helps cover legal representation, court costs and defence expenses connected to a covered Public and Product Liability claim.
Accidental incidents: Covers unexpected events during ordinary business activities, such as slips, trips, spills, damaged property or product-related accidents.
On-site or off-site work: Applies when you work at client locations, public spaces, events, temporary venues or other business-related sites.
Manufacturing or design defects: Covers claims where a product causes injury or damage because of how it was designed, made, assembled or supplied.
Failure to provide adequate warnings or instructions: Covers claims linked to inadequate product warnings, unclear instructions or missing safety information.
What Is Usually Not Covered?
Public and Product Liability insurance is mainly focused on third-party injury and property damage, not professional advice mistakes, employee injuries, cyber issues or product recall costs. Here’s what’s generally excluded from Public and Product Liability Insurance:
Intentional damage or wrongdoing: Deliberate damage, dishonest conduct or knowingly unsafe behaviour is generally not covered.
Known defects or prior claims: Issues you already knew about before taking out the policy may be excluded.
Product recalls or replacement costs: Recalling, repairing or replacing faulty products usually requires separate cover or a specific extension.
Professional advice errors: Claims involving financial loss from advice or service mistakes are usually covered under Professional Indemnity Insurance.
Employee injuries: Injuries to your employees are generally handled through workers’ compensation, not public liability insurance.
Contractual liabilities accepted under contract: Extra responsibilities accepted only under contract may not be covered.
Cyber incidents or data breaches: Cyberattacks, privacy breaches and data loss usually require cyber insurance.
Who Needs Public and Product Liability Insurance?
Public and Product Liability insurance is especially important where your work environment or products carry a clear risk of third-party injury or property damage.
Some professions that commonly consider Public and Product Liability cover are photographers, yoga instructors and businesses that regularly interact with the public or work across client sites. It is also relevant for retailers, cafés, tradespeople, contractors, event organisers, manufacturers, wholesalers and businesses that supply, handle or install physical products.
A business does not need to manufacture a product from scratch to face exposure. Selling, importing, distributing, packaging, installing or supplying goods can still create product liability risk if those goods later cause damage.
In many cases, insurance may also be a business requirement. A landlord may ask for a Certificate of Currency (CoC) before you lease a space. A client may require proof of cover before signing a contract. Or an event organiser may require public liability insurance before approving your stall or participation. Without the right liability cover, you may miss out on work even if you are qualified to do the job.
How Much Does Public and Product Liability Insurance Cost?
The cost of Public and Product Liability insurance varies according to your business type, annual revenue and level of cover. While it can start from $3 per week through reliable insurers, it can vary significantly from business to business.
A low-risk service business will usually be assessed differently from a business in construction, hospitality, events, retail or manufacturing. The higher the chance of injury, property damage or product-related claims, the more the policy may cost.
In Australia, premiums may also depend on business location, as state-based duties, taxes and charges can affect the final amount. When requesting a quote from your Public and Product Liability insurer, accurate disclosure of your business information is essential. Business activities, products supplied, turnover, work locations and risk exposures should be clearly described so the quote accurately reflects the business.
If you are exploring cover options, Sami Insurance provides Public and Product Liability cover with a straightforward online quoting process and access to proof of cover, subject to application, policy terms and underwriting approval.
Key Considerations Before Choosing a Public and Product Liability Policy
Choosing the cheapest policy can be tempting, especially when you are trying to control business costs. But with liability insurance, the policy wording matters as much as the price.
Before choosing a Public and Product Liability policy:
Check whether the policy limit, such as $5 million, $10 million or $20 million, meets your contractual, industry or operational requirements.
Understand how much your business must pay out of pocket if a claim is made.
Review exclusions carefully, especially for activities, locations, products or work types that may not be covered.
Compare what each insurer covers, how claims are handled and what conditions apply.
Make sure the policy meets any client, landlord, supplier, or event requirements.
Important: A policy that looks cheaper upfront may not be suitable if it excludes the exact activity, product or work environment your business relies on. The right policy should match how your business actually operates.
Third-party injury or property damage risks can arise if meeting clients, visiting sites or selling products are part of your business activity. Public and Product Liability insurance helps protect businesses against costly claims and legal expenses if allegations of liability arise.
If you want a practical way to manage third-party injury and property damage risks, a reliable insurance provider can help you with suitable cover. At Sami Insurance, we help Australian small businesses, freelancers and sole traders access straightforward Public and Product Liability insurance tailored to how they work. Get in touch with us to explore your options or request a quote online.
FAQs
Is Public and Product Liability insurance compulsory in Australia by law?
Public and Product Liability insurance is not compulsory for every Australian business. However, some industries, contracts, landlords, event organisers or regulators may require it before you can trade, lease premises, attend an event or start work.
Do I need public liability if I run a small business or work from home?
You may still need public liability insurance if clients visit your home, you visit client sites, attend events, work in shared spaces or interact with the public as part of your business. The need depends on your actual risk exposure, not just your business size.
Does it cover damage to my own property?
No. Public and Product Liability insurance is designed to cover third-party injury or third-party property damage. Damage to your own business property, tools, stock or equipment usually requires separate business property or contents cover.
What should I look for when comparing policies?
Look at the coverage limit, excess, exclusions, whether both Public and Product Liability are included and whether the policy meets any contractual or industry requirements. Compare the wording and cover scope, not just the premium.
Written by
John David
Insurance Manager | Sami Insurance
With over 40 years of experience across the global insurance and reinsurance landscape, John David is a seasoned leader dedicated to simplifying protection for the modern workforce. As the Insurance Manager at Sami Insurance, John combines deep technical underwriting expertise with a passion for the evolving Insurtech space. John works closely with the Sami team to provide freelancers and sole traders with insurance solutions that are radically simple, transparent, and cost-effective. By leveraging cutting-edge technology and a sharp eye for detail, he helps clients navigate complex risks with a friendly, human-centric approach.
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