As Australia’s insurance experts for tradies, we often get asked the question, ‘how much insurance do I need’? For many Aussie tradies, they know they have to sort out insurance, but they’re not 100% sure which insurance they need, what that insurance covers, and how much they should be insured for.
We’ve created this article guide to answer these key questions for you for Public Liability Insurance. We’ll look at what Public Liability Insurance is, and how much Public Liability Insurance you’ll likely need for your business. First, let’s start with the basics.
What Is Public Liability Insurance?
Public Liability Insurance is crucial for protecting your business against claims of property damage or personal injury to third parties due to your business activities.
If an accident happens on your premises or as a result of your business operations elsewhere, this insurance helps cover related legal fees and compensation costs. This ensures your business is able to continue operating without crippling financial setbacks.
Do I Need Public Liability Insurance?
For any tradie, Public Liability Insurance isn't just advisable; it's essential.
Whether you're a plumber, electrician, or carpenter, your work involves risks not only to yourself but also to others and their property.
Having this insurance not only protects you financially, but also enhances your reputation as a responsible and reliable professional.
What DOES Public Liability Insurance Cover?
Public Liability Insurance covers claims of bodily injury or property damage caused to third parties due to your business operations. This includes accidents on your business premises or at a client’s location.
It provides financial protection against the costs of legal action and compensation claims, ensuring your business can continue operations unaffected by these risks.
What DOESN’T Public Liability Insurance Cover?
Public Liability Insurance does not cover injuries to your employees, professional negligence, or intentional acts. It also excludes claims related to your product’s quality or performance. For these types of risks, consider Workers' Compensation, Professional Indemnity, or Product Liability Insurance respectively to ensure you have comprehensive coverage.
How Much Public Liability Insurance Do I Need?
The amount of Public Liability Insurance you need depends on several factors regarding the unique specifications of your business.
Let’s explore how these factors determine the necessary coverage:
Business Size
Larger businesses typically face more significant risks due to their higher volume of interactions and activities. This increases the potential for claims, meaning a higher coverage amount may be necessary to ensure adequate protection. Larger businesses are also often more likely to take on bigger jobs, which come with bigger risks or more to lose; and therefore, more coverage is needed.
The Type of Business
High-risk industries like construction may require higher coverage amounts for insurance, due to the increased chance of significant claims. Businesses involving manual work, heavy machinery, or working at heights are more likely to need higher levels of insurance.
Project Scale and Budget
The size and scope of your projects can influence the amount of insurance you need. Larger, more complex projects often carry higher risks, and usually involve more money (higher stakes), so tradies involved in big scale, or big money projects will need more substantial coverage.
Client Requirements
Some clients, particularly larger commercial clients or government contracts, may specify minimum levels of Public Liability Insurance in their contracts. Ensuring you meet these requirements is crucial for securing and maintaining these contracts.
Industry Standards
Different industries have varying standards and typical coverage amounts. Understanding the common practices within your industry can help guide your decision on the appropriate level of coverage.
Location
Operating in regions with higher litigation rates or in densely populated urban areas can impact the level of coverage needed, because you may be more likely to face claims. When you are more likely to face claims, you need higher coverage to protect against potential financial losses from a claim (or many claims).
Revenue and Subcontractor Use
Your business's revenue and the extent to which you use subcontractors can also affect the required coverage. Higher revenue often means you’ve got more extensive operations going on, which will need more coverage. Similarly, if you use subcontractors a lot, it will likely increase your risk, as you’ve got many people operating underneath you but not necessarily within you direct close management, and likely more ‘moving parts’. In this situation you’ll need higher insurance limits, to sufficiently cover the claims you may have to deal with.
What Are The Different Coverage Amounts Available For Public Liability?
Choosing the right Public Liability coverage amount depends on your specific business risks and the scale of your projects, so it is best to consult with a specialist to determine how much you need. (That’s where we come in at Tradesure, as Tradie Public Liability experts). However, to give you some idea of what you might expect, there are some common coverage amounts that are appropriate for many businesses in Australia.
Let's explore how each level of coverage would often be appropriate.
$5M — When Would This Be Sufficient?
A $5 million coverage is often sufficient for smaller trades or those working primarily in residential settings. It's usually ideal if your projects are less risky, or if you're not regularly engaged in large commercial jobs.
$10M — When Would This Be Sufficient?
This level of coverage is usually appropriate for tradies who handle mid-sized projects or work frequently with larger commercial clients. It's probably a safer bet if your business activities pose moderate risks that could potentially lead to more significant claims.
$20M — When Would This Be Sufficient?
Opting for $20 million in coverage is typical for large-scale contractors, or businesses that operate in high-risk environments. This may include areas such as large construction sites or major commercial developments. This coverage ensures that even the most substantial claims can be managed effectively, keeping your business secure and operational.
What Do I Do To Get Started?
The first best step is to get in touch with us at Tradesure and request a quote for your Public Liability Insurance. We’ll get in touch with you about options, and can provide you with more information on the different types and coverage amounts for Public Liability and help you determine how much coverage you’ll need. At Tradesure, we pride ourselves on providing the fairest rates for tradies while tailoring our policies to match your specific needs without overcharging.
Then it’s as simple as getting things underway — which our friendly team is able to guide you through. We even offer the flexibility to pay your premiums monthly, so you can manage your cash flow effectively without compromising on access to our quality coverage. This also means you can likely get the protection of insurance coverage sooner, as you won’t need to pre-plan the financial side of an annual payment.
Protect Your Business and Finances: Get A Public Liability Insurance Quote Today
Ready to protect your business with Public Liability Insurance? Visit our
Public Liability Services page
to learn more about how Tradesure can help safeguard your livelihood.
Our team is here to guide you through the insurance process to ensure you get the coverage best suited to your needs. So don’t wait — secure your business today.
