As the 2026 – 2027 financial year begins, Australian businesses are reviewing budgets, managing risks, and planning for growth. Whether you're a sole trader, contractor, tradie, consultant, retailer, or small business owner, protecting your business from unexpected third party claims remains an important consideration.

Public liability insurance can help provide financial protection if your business activities result in third party personal injury or property damage. While no business expects accidents to happen, even a single incident can lead to significant legal and financial costs.

This guide explains how public liability insurance works, why it remains relevant in the 2026 – 2027 financial year, and what Australian businesses should consider when evaluating cover.

What Is Public Liability Insurance?

Public liability insurance is designed to cover your legal liability for compensation claims arising from personal injury to a third party or damage to third party property caused by your business activities, subject to the terms, conditions, exclusions, and limits of the policy.

Depending on the policy, cover may also include associated legal defence costs where the insurer agrees to provide cover.

Public liability insurance is commonly considered by:

• Sole traders
• Small business owners
• Electricians
• Plumbers
• Builders
• Landscapers
• Cleaners
• Painters
• Handymen
• Retail businesses
• Airbnb operators
• Consultants who meet clients in person
• Event service providers

Why Public Liability Insurance Matters in the 2026 – 2027 Financial Year

Australian businesses continue to operate in environments where interactions with customers, suppliers, contractors, and members of the public are part of daily operations.

Common scenarios that may lead to claims include:

• A customer slipping and falling at your premises
• Accidental damage to a client's property while performing work
• Injury caused by tools, equipment, or materials used during business activities
• Property damage arising from installation or maintenance work
• Incidents occurring at markets, events, exhibitions, or job sites

For many businesses, the cost of defending a claim can be substantial, even where liability is disputed.

As operating costs continue to rise across many industries, businesses are increasingly reviewing risk management strategies and insurance arrangements as part of their annual financial planning. Looking for cost effective public liability insurance? Get a New Wave Public Liability Insurance Quote!

Who Needs Public Liability Insurance?

While public liability insurance is not legally required for every Australian business, many organisations, councils, landlords, project managers, and clients may require evidence of cover / certificate of insurance for public liability insurance before allowing work to commence.

Businesses that regularly interact with the public or work on client premises often consider public liability insurance an important part of their overall risk management framework.

Industries commonly seeking public liability insurance include:

Trades and Construction

• Electricians
• Plumbers
• Carpenters
• Builders
• Tilers
• Painters
• Roofers
• Concreters

Service Businesses

• Cleaners
• Gardeners
• Mobile service providers
• Property maintenance businesses
• Airbnb providers

Retail and Hospitality

• Retail stores
• Market vendors
• Cafés
• Food service operators

Professional and Consulting Businesses

Even businesses with lower physical risk exposures may consider public liability insurance where they meet clients face to face or host visitors at their premises.

What Does Public Liability Insurance Typically Cover?

Coverage varies between insurers and policies. Generally, public liability insurance may respond to claims involving:

Third Party Personal Injury

If a member of the public suffers an injury allegedly caused by your business activities, a claim may be made seeking compensation.

Third Party Property Damage

Cover may apply where your business causes accidental damage to someone else's property.

Legal Defence Costs

Some policies may include legal costs associated with defending covered claims, subject to policy terms and conditions.

Always review the Product Disclosure Statement (PDS), policy wording, and any applicable Target Market Determination (TMD) to understand what is and isn't covered.

What Is Usually Not Covered?

Public liability insurance policies generally contain exclusions and limitations.

Examples may include:

• Intentional acts
• Professional advice errors or omissions
• Employee injuries
• Contractual liabilities beyond common law obligations
• Known claims or circumstances
• Pollution related claims (unless specifically covered)
• Certain high risk activities

Coverage varies significantly between insurers, so businesses should carefully review policy documentation before purchasing cover.

Choosing the Right Public Liability Insurance for Your Business

When comparing policies for the 2026 – 2027 financial year, consider:

Coverage Limits

Many Australian businesses choose limits such as:

$5 million

$10 million

$20 million

The appropriate level of cover depends on your industry, contracts, client requirements, and risk profile.

Business Activities

Ensure all business activities are accurately disclosed during the application process.

Policy Conditions

Review:

Exclusions

Endorsements

Excess amounts

Coverage limitations

Claims Support

Consider the insurer's claims process, support services, and experience in your industry. New Wave Insurance has an easy online system to submit a claim and has a supportive claims team. Get a Public Liability Insurance Quote from New Wave.

Public Liability Insurance and EOFY Business Planning

The start of a new financial year is often a good opportunity to:

• Review existing insurance arrangements
• Assess changes in business operations
• Update turnover estimates
• Add new business activities if required
• Review contractual insurance requirements
• Ensure coverage remains appropriate for current operations

Businesses that have expanded services, hired contractors, purchased equipment, or entered new markets may benefit from reviewing their insurance needs.

Risk Management Tips for Australian Businesses

Insurance forms only one part of an effective risk management strategy.

Businesses can also reduce risks by:

• Maintaining safe work practices
• Conducting regular site inspections
• Providing staff training
• Keeping clear documentation
• Using appropriate signage
• Following workplace safety procedures
• Reporting incidents promptly

Combining risk management practices with appropriate insurance arrangements may help protect business continuity.

Public Liability Insurance FAQs

Is public liability insurance mandatory in Australia?

Public liability insurance is generally not legally required for most businesses. However, clients, landlords, councils, or contracts may require businesses to hold cover before work can commence.

How much public liability insurance do I need?

The level of cover depends on your business activities, contractual obligations, and risk profile. Many businesses choose limits ranging from $5 million to $20 million.

Does public liability insurance cover employee injuries?

Employee injuries are generally covered under workers' compensation schemes rather than public liability insurance.

Can sole traders get public liability insurance?

Yes. Many sole traders choose public liability insurance to help protect against claims arising from their business activities.

Final Thoughts

As Australian businesses enter the 2026 – 2027 financial year, reviewing risk management strategies and insurance arrangements remains an important part of business planning.

Public liability insurance may help protect businesses from the financial consequences of third party injury and property damage claims, subject to policy terms, conditions, exclusions, and limits.