How much does public liability insurance cost?

29 May 2024

Being a tradesperson is not just about nailing the job – it's also about making sure you've got the right backup plan for any situation. Public liability insurance is essential for any tradesperson as it offers financial protection against mishaps that might occur during work operations. However, understanding the nuances of public liability insurance policies, including coverage and cost, can be as complex as the jobs you undertake.

Why Do You Need Public Liability Insurance?

Accidents can happen no matter what industry you're in, but the stakes are higher in trade. As a tradesperson, you are more than likely operating in public spaces - homes, commercial buildings, or on the side of the road. Public liability insurance protects you from paying the cost of damage or injury to someone else's property or person that occurs as a result of your work. Given the often hefty costs associated with such incidents, public liability coverage provides an essential risk management solution for tradespeople and defense against public liability claims.

What’s The Cost of Not Having Public Liability Insurance?

The cost of mishaps without public liability insurance can quickly spiral out of control. For example, picture yourself accidentally damaging a client's expensive marble kitchen countertop. Without insurance, the bill goes straight to you, which can easily stretch into the thousands. Not to mention, in certain cases, legal proceedings and settlements can result in even heavier financial burdens. Public liability insurance isn't just a 'should-have'; it's a safety net for your business that protects your hard-earned assets.

What Does Public Liability Cover?

Public liability insurance covers the costs of legal actions including defending claims brought against you and any compensation payable to third parties, for death, personal injury, or property damage. It is also likely to include product liability insurance, offering protection if a product you sold or designed causes injury or damage. When you're considering public liability insurance for yourself, it is essential to understand the breadth of what is covered.

What Doesn’t Public Liability Cover?

Public liability insurance won't cover incidents where there is a professional error or omission, such as providing incorrect advice that leads to financial loss for your client. It also doesn't cover employee injuries or damage to your own property. Just as important when considering public liability insurance is what's not included.

Factors Influencing the Cost of Public Liability

The cost of public liability insurance for tradespeople is not one-size-fits-all and can depend on several key factors. This includes the size of your business, your business location, the amount of insurance coverage required, and what's included or excluded in your policy. For example, a larger business with more business turnover and employees might naturally have a higher cost as they typically require more coverage. Generally, the more work you do in a year, the more expensive your insurance premiums will be.

Does Public Liability Cover Employees and Subcontractors?

Typically, public liability insurance does not cover injuries to employees or subcontractors as this falls under workers’ compensation insurance. It is crucial to have clear conversations and agreements with your staff and subcontractors regarding their insurance cover and responsibilities, especially if you are hiring them for a specific job.

Frequently Asked Questions (FAQ)

How do I know how much public liability insurance I need?

This largely depends on the specifics of how your business operates but a good rule of thumb is to have enough coverage to match the highest anticipated costs from a potential claim. Discussing with an insurance broker can help you get a clear understanding of your business activities and potential risks.

Can I pay my public liability insurance every month?

Yes, you have the flexibility to pay for your public liability insurance monthly. Depending on the insurance company, many offer payment plans that allow you to spread the cost over the year, making it more manageable for your business's cash flow. It's always advisable to review the terms offered by your insurance provider and ask any questions if you're unsure.

How much does public liability insurance cost for businesses?

The cost of public liability insurance varies widely depending on several key factors, making it difficult to provide a one-size-fits-all price. These factors include the size of your business and its location, turnover, how much coverage is needed, and much more. Generally, a small business might expect to pay anywhere from a few hundred to several thousand dollars annually for public liability insurance. However, the best way to get an accurate estimate is to obtain quotes with specific details of your business needs and risk factors.

What is the average monthly cost of public liability insurance for a small business?

The average monthly cost of public liability insurance varies for small business owners like the size of your business and the level of coverage you choose. It's best to get a quote for a precise figure.

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