Public Liability Insurance Cost
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The cost of public liability insurance depends upon many different factors, and can literally range from $500 to $500,000 or more!

Given the huge spread, there are clearly a lot of factors at play when calculating the cost of public liability insurance for a business.

If you’re simply after some quotes, please call us on 1800 090 888 or click the button below.

For those that are more interested in learning about public liability insurance cost and how it is calculated, please read on…



Public liability insurance is undoubtedly the most common form of business insurance.

If you could only afford one type of insurance for your business, public liability is likely the one you’d want to spend your money on.

But just how much money should you be spending on public liability insurance?

The answer of course depends hugely on the specifics of your business.

In this guide we’ll run through the following factors which can affect your public liability insurance cost:

  • Level of cover
  • Size of business
  • Business activities
  • Work locations
  • Subcontractor and labour hire use
  • Claims history

There can be other factors, but the vast majority of premium pricing will come down to these factors.

We’ll now take a look at each on in closer detail.

Level of cover

We’ll start with a very easy one, which is the amount of cover you require.

For most businesses in Australia there are three options for the amount of public liability insurance you can hold:

  • $5 million
  • $10 million
  • $20 million

Some businesses operating in higher risk areas, such as those involving public utilities and infrastructure, may require higher amounts such as $50 million.

It makes sense that the more cover you need, the most the insurance is going to cost.

Whilst $5 million cover will cost you more than $10 million, the good news is that the price won’t double from $5 to $10 million, and certainly won’t quadruple from $5 to $20 million!

Each insurance company will have a slightly different calculation for how the increase in coverage affects the premium, and the only way to know this is by requesting comparative quotes.

The amount of cover you require will depend largely on the types of contracts your business has entered into, or what licensing requirements your business may have.

For example, an electrician in QLD will require a minimum of $5 million for their licence, but they may have signed a contract to work on a shopping centre that requires all contractors have $20 million cover.

Size of business

Just as the size of the insurance coverage has an impact, so to does the size of the business being insured.

There are two ways that an insurance company may judge the size of your business:

  • Number of staff
  • Annual revenue

In some cases an insurer may take both numbers into account, but this isn’t common at the SME level.

Why does the size of business impact the cost?  Simply because a larger business has more going on, and therefore more changes of having a claim.

Lets use a café as an example.  Café 1 is a small café with only five staff, and café 2 is much larger, operating in a major shopping centre with up to twenty staff working at any given time.

There is potentially four times the chance of someone going wrong, simply because there are four times the number of workers, and the potential for human error.

It also means there are many more customers and members of the public coming through the café, which again increases the changes of someone suffering a slip-and-fall event or even food poisoning.

Ultimately, the larger the business, the more opportunities there are for something to go wrong, resulting in a higher chance of a claim occurring.

The higher change of a claim occurring means that the insurance company needs to increase the cost of the public liability insurance.

It is true that a larger business may have better procedures and processes in order to reduce the chance of a claim, and this can be taken into account when pricing the insurance for a much larger business.

Business activities

The type of work undertaken by the business can have an enormous impact on the cost of the company’s public liability insurance.

The insurer will be looking at the business activities and judging the likelihood of a public liability claim, along with the potential size of that claim.

We’ll compare two businesses of the same size, but different business activities, to demonstrate.

Company 1 is an accounting firm with 100 staff spread across two city offices.  They have some clients and associated people visiting the office, but are essentially just a group of people working in the office all day.

Company 2 is a mobile welding business, specialising in heavy transport.

They too have 100 staff, with 75 of those being out on the road undertaking welding and repair work on trucks and trailers.

The main risk for company 1 is that visitors to their office suffer an injury, such as tripping over a hazard in the office.

You can’t say there is no risk of this happening, but the risk is very low, and therefore their public liability insurance cost would be relatively low.

The risks for company 2 are huge by comparison.  They are undertaking welding work at client’s premises, which brings a major fire risk to property that is not owned by them.

Furthermore, they are working on heavy transport assets, and if their work was to be negligent and result in a truck or trailer crash, the consequences could be catastrophic.

This perfectly demonstrates how two businesses which are identical in size could have hugely different public liability insurance premiums based solely on their business activities.

Essentially, the higher risk you work is, the higher your insurance cost is going to be.

Work locations

Work locations can be viewed in a similar way to business activities, but there are some important differences.

Some work locations carry a higher risk of claiming, and a higher potential claim size.

For this example we’ll use two electrical contracting companies.  Both are the same size, but operate in different locations.

Electrician 1 is a domestic electrician, which most work being undertaken in private homes.

Electrician 2 is contracting to an underground mining business.

Right off the bat, working in an underground mine is typically going to be more stressful or hazardous than working in someone’s home, which can increase the potential for a claim.

More important is the potential size of the loss.  There is certainly the potential for a large claim involving a private household, but in a large mining operation it could be stratospherically higher.

An error in the electrical work could see a large mine site have to close for hours or even days whilst the issue is rectified.

What might it cost to shut down a massive mine for a day?  It could easily be millions of dollars that you’re on the hook for.

Any work locations that carry a higher level of risk, or a higher potential for a much larger claim, will carry a much higher public liability insurance cost.

These locations can include some of the following:

  • Mine sites
  • Airports and seaports
  • Power stations
  • Public infrastructure
  • Hospitals

This list won’t be relevant for many businesses, but can be very relevant for businesses operating in the trades and services.

Subcontractor and labour hire use

If your businesses uses subcontractors or labour hire you will typically find that the cost of your public liability insurance will be higher.

Part of this comes down to an issue known as worker-to-worker injuries.

This is were an employee of one business is responsible for an injury to an employee of another business on the same location.

If the injury was caused by an employee of the same business, there is no issue, but if they’re an employee of another business, the worker’s compensation provider may go after the other employer.

It sounds a little complex, but essentially there is a higher risk of a public liability claim when workers employed by different companies are working together, and typically this is the case when subcontractors or labour hire staff are being used.

Another potential risk is that subcontractors or labour hire staff might not have the same level of familiarity with the workplace as permanent employees do, and therefore the chances of a claim are higher.

We’re certainly not suggesting that subcontractors or labour hire workers are any less competent than other works, but it is something that will impact upon the insurance cost.

If the percentage of revenue paid to subcontractors and labour hire is particularly high, some insurers will refuse to offer public liability insurance at any cost.

Claims history

The final factor we’ll look at is the claims history for a business.

It is the size and number of recent public liability insurance claims that could have an impact on the cost of insurance.

For a single small claim you will likely see no increase to your premium, but larger or more frequent claims can have an impact.

If the claim was large enough, or there was enough of them, you could find that you cannot get insurance at all.

This is where a good insurance broker will be able to assist.  They can put together a case that takes into account your claim mitigation efforts, in order to help secure a more competitive premium.

Other factors

Whilst the factors we have listed above would cover 99.9% of cases, there may be additional factors in extreme cases.  This wouldn’t be typical for an SME client however.

The best way to find out exactly how much your public liability insurance will cost is to request a quote from our team of insurance brokers.

They’ll help you to find a policy that best matches your needs, along with finding you a suitable policy at a competitive price.

When comparing public liability quotes, remember that the cheapest isn’t always the best.  It’s important to know you are comparing apples with apples, and only the experience of a qualified insurance broker can guarantee that.