Public & products liability insurance for Australian businesses
An accident, injury or property damage involving a customer, supplier or member of the public can create a significant liability exposure for a business. RMA Insurance Brokers helps clients review public and products liability insurance around the activities they undertake, the products they supply and the contractual responsibilities they accept.
Supporting businesses where liability may arise.
Overview
Liability insurance overview
Public and products liability insurance may protect a business where it becomes legally liable to pay compensation to a third party for personal injury or property damage arising from its activities or products.
Depending on the policy and circumstances, cover may also include certain costs associated with investigating, defending and settling an insured liability claim.
The activities disclosed to the insurer, products supplied, limits selected and policy exclusions all affect how the insurance may respond.
Who it is for
Who should consider liability insurance?
Liability insurance is relevant to businesses whose activities, products or premises create the potential for injury or damage to other people or their property.
- Retail and hospitality businesses
- Trades and contractors
- Wholesalers, manufacturers and product suppliers
- Rural and regional businesses
- Agribusinesses and farming operations
- Service businesses operating at client or third-party premises
The exposure differs depending on what the business does, where work is performed, the products supplied and the contractual responsibilities it accepts. For many businesses, liability insurance sits alongside broader Business Insurance, and for farming and agribusiness operations it often forms part of the broader Farm Insurance program.
Liability arising from professional advice or services may require separate Professional Indemnity Insurance. Our Insight on public liability for farmers and rural contractors looks more closely at these rural exposures.
Cover
What cover may be available?
Public and products liability policies differ between insurers. The activities disclosed, products supplied, limits selected and the conditions shown in the policy schedule determine how the insurance applies.
The areas below are commonly considered when liability insurance is reviewed, subject to the insurer and the policy wording.
Public liability
Public liability insurance may respond where a business becomes legally liable to pay compensation to a third party for personal injury or property damage arising from the activities of the business.
The circumstances covered depend on the policy wording and the activities disclosed to the insurer.
Products liability
Products liability insurance may respond where a product manufactured, sold, supplied, assembled or distributed by the business causes personal injury or property damage.
The products insured, territorial limits and policy exclusions should be considered when cover is arranged.
Property in your care, custody or control
Property in a business’s care, custody or control is commonly subject to an exclusion, although some policies may provide limited cover, a specific write-back or a sub-limit depending on the wording.
The scope, limits and circumstances in which any cover applies vary between policies and should be checked rather than assumed.
Property damage
Liability insurance may respond where the business becomes legally liable for damage to property belonging to another person or organisation.
This is different from insurance covering damage to the business’s own property.
Investigation & defence costs
Depending on the policy, cover may include certain costs involved in investigating, defending and settling an insured liability claim, in addition to compensation the business is legally liable to pay.
Whether defence costs are payable within or in addition to the policy’s liability limit varies between insurers and circumstances and should be confirmed from the policy wording and schedule.
Advertising injury
Some policies may provide cover for certain liability arising from advertising activities carried out by or on behalf of the insured business.
The scope and exclusions vary between policies.
Contracts
Contracts can change your liability exposure
Businesses are regularly asked to enter agreements containing indemnities, warranties and other obligations that change or increase the liabilities they assume.
tenancy agreements
supply agreements
customer or principal contracts
construction contracts
service agreements
subcontracting arrangements
A contract may require a business to accept responsibility that extends beyond the liability it would ordinarily have at law.
That does not mean the insurance policy will automatically cover the additional responsibility assumed under the contract. Some onerous contractual liabilities may not be commercially insurable.
RMA Insurance Brokers helps clients review the insurance requirements contained in commercial agreements and identify areas that may need further consideration.
Where a contract requires detailed legal interpretation, negotiation or advice about the legal effect of a clause, that work falls outside insurance broking advice and may require review by an appropriately qualified legal adviser.
Boundaries
Where other insurance applies
Claims involving registered motor vehicles are generally addressed through compulsory third party or Commercial Motor insurance, although some vehicle-related liability, including loading, unloading or vehicle-mounted plant operating as a tool of trade, may be treated differently depending on the policy wording.
Liability arising from professional advice or services may require separate Professional Indemnity Insurance.
Cyber incidents, data breaches and electronic data exposures generally require separate Cyber Insurance.
Information
What information may be needed for a review?
When reviewing liability insurance, we usually look at:
business activities and annual turnover
locations where work is undertaken
products manufactured, sold, supplied or distributed
use of contractors and subcontractors
significant contracts or principal requirements
interstate, overseas or export exposures and previous liability claims
Additional information may be required depending on the occupation or risk.
Accurately describing the activities undertaken is particularly important. Changes to services, products or locations should be disclosed when the insurance is reviewed.
Limits
What may not be covered?
Not every liability claim or circumstance will be covered under a public and products liability policy. Exclusions, limits, excesses and conditions differ between insurers, so some areas are worth checking carefully when reviewing your cover:
- the cost of rectifying or redoing faulty or defective workmanship itself, although resulting damage caused to other property may still be considered under the policy
- damage to the product itself where that damage results from a defect in the product
- work-related employee injury claims generally dealt with under workers compensation arrangements
- registered motor vehicle liabilities generally addressed through CTP or Commercial Motor insurance, subject to the policy wording and circumstances
- asbestos-related claims
- activities or products not disclosed to the insurer
- liability assumed solely under a contract or agreement, beyond what would already exist at law without that contract
- claims arising outside applicable territorial or jurisdictional limits
- pollution and contamination, other than in the limited circumstances a policy may allow
- deliberate or intentional acts, or injury or damage that was expected or intended
- the cost of recalling, withdrawing or inspecting a defective product from the market
- liability arising from professional advice or services, which may require separate Professional Indemnity Insurance
This is not a complete list.
The relevant policy wording, schedule, endorsements and circumstances of the claim determine how the insurance responds.
When should liability insurance be reviewed?
A review is particularly worthwhile when a business has:
- commenced new activities or services
- introduced new products
- entered a significant new contract
- materially changed its use of subcontractors
- materially changed turnover
- moved to or added premises
- entered new geographic or export markets
- experienced a liability claim or significant incident
Customer, landlord, principal or worksite agreements may require particular liability limits, so these requirements should be checked against the insurance actually arranged.
The appropriate liability limit depends on the business, its activities, contractual requirements and the potential severity of a claim.
Products liability limits may apply as an aggregate across the policy period, so the way the limit operates should also be checked.
Broker support
Liability insurance built around what your business does
Liability exposures are shaped by the activities a business undertakes, the products it supplies, where work is performed and the responsibilities it accepts under contracts. Those details matter when insurers assess the risk and when a claim occurs.
We work through those exposures with clients, approach suitable insurers and help keep the cover aligned as the business changes. If a liability claim arises, we also help with notification and work through the process with the insurer.
RMA Insurance Brokers works with businesses across rural, regional and metropolitan Australia, including trades, contractors, retailers, manufacturers, service businesses and agribusinesses. Through our relationship with rma network Livestock & Property Agents, we have connections throughout regional Australia. We also support clients outside the rma network and across other parts of Australia.
How we help
How we help businesses
review the activities undertaken by the business
identify public and products liability exposures
consider liability limits and contractual requirements
review product and geographic exposures
consider contractor and subcontractor arrangements
assist with policy changes, renewals and liability claims
Where contractual issues require legal interpretation or negotiation, an appropriately qualified legal adviser may also need to be involved.
What happens after you enquire?
We contact you
A broker from RMA Insurance Brokers will get in touch to understand the business, its activities, products, work locations, contractual requirements and whether you currently hold liability insurance.
We confirm what is needed
We will explain what information is needed, answer your questions and confirm the next step before approaching insurers.
Useful information to have available
- current policy schedule and renewal date, if applicable
- description of business activities
- annual turnover and work locations
- products manufactured, sold or supplied
- contractor and subcontractor arrangements
- major contracts, export exposure and previous claims
FAQs
Frequently asked questions
What is the difference between public liability and products liability insurance?
Public liability generally relates to personal injury or property damage arising from the activities of the business.
Products liability relates to personal injury or property damage caused by products manufactured, sold, supplied, assembled or distributed by the business.
The scope of cover depends on the policy wording and the activities disclosed to the insurer.
Does liability insurance cover legal defence costs?
Depending on the policy and circumstances, liability insurance may cover certain costs involved in investigating, defending and settling an insured liability claim.
The policy wording determines which costs are covered and whether they sit within or in addition to the applicable liability limit, so this is worth confirming from the policy wording and schedule.
Does public liability cover employees?
Public liability insurance generally does not provide the primary cover for employees who suffer work-related injury or illness.
Employee injury is generally addressed through the relevant workers compensation arrangements, which differ between Australian states and territories.
The arrangements that apply depend on the circumstances and the jurisdiction.
Does my liability insurance automatically cover liabilities in a contract?
Not necessarily.
A contract may require a business to assume liability beyond what would already exist at law without that contract.
Liability assumed solely under a contract is commonly excluded, so the additional responsibility should not be assumed to be covered by the existing policy.
RMA Insurance Brokers helps clients review the insurance implications, while detailed legal interpretation or negotiation of contract clauses may require an appropriately qualified legal adviser.
What information is needed for a liability insurance quote?
Information generally includes the business activities and annual turnover, locations where work is undertaken, products manufactured, sold, supplied or distributed, use of contractors and subcontractors, significant contracts and previous liability claims.
Additional information may be required depending on the occupation or risk.
RMA Insurance Brokers helps clients identify the information required before approaching insurers.
Explore
Related insurance
Business Insurance
Broader insurance for business property, interruption, theft, equipment and other commercial risks.
Farm Insurance
Broader insurance for farming operations where liability forms part of the overall farm risk.
Professional Indemnity Insurance
Insurance considerations for businesses providing professional advice, services or expertise.
Cyber Insurance
Insurance considerations for cyber incidents, data breaches and electronic exposures that sit outside a liability policy.
Construction & Contract Works Insurance
Insurance considerations for construction projects, contractors and project-related property and liability exposures.
Commercial Motor Insurance
Insurance for vehicles used in business operations where motor liability exposures sit outside a public liability policy.
Review your liability insurance
Business activities, products and contractual responsibilities change over time.
RMA Insurance Brokers helps businesses review whether their public and products liability insurance still reflects the work they undertake and the exposures they face today.
The information on this page is general information only and does not take into account your objectives, financial situation or needs. Cover is subject to the terms, conditions, limits and exclusions of the relevant policy. Insurance products and available cover vary between insurers. Please review the relevant policy documentation and obtain advice appropriate to your circumstances before making a decision.