Summary: Public liability covers injury or property damage caused by your business activities and premises. Product liability covers injury or damage caused by something you sold, supplied, made or installed. In Australia the two are usually written together as one combined policy, and most businesses that supply anything physical need both.
What’s the difference or do you need both?
Public liability vs product liability comes down to what triggers the cover.
Public Liability: Protects you against injury or property damage caused by your business activities and premises.
Product Liability: Protects you against injury or damage caused by something you sold, supplied, made or installed.
Getting the distinction right matters. A single personal injury claim can run into millions of dollars, and if you’re insured under the wrong policy, you could end up paying it yourself.
The easiest way to remember the difference is:
- Public = your business is accused of the problem.
- Product = your product is accused of the problem.
In this blog guide, you’ll learn which type of liability applies to your business, when you might need both, and how to make sure you’re not left exposed when a claim arises.
Still unsure whether your business needs public liability, product liability or both? Explore who we help to see how Barrack Broking helps businesses find the right cover for their industry. You can also speak with our insurance experts for advice on the liability cover your business needs.
What Is Public Liability Insurance?
Public liability insurance protects your business against claims from third parties who suffer personal injury or property damage because of your operations. It does not cover injuries to your own staff, that is workers’ compensation.
Public liability insurance responds to two main types of claims: personal injury and property damage. It is a common contractual requirement, and many Australian small businesses are expected to hold public liability cover even where it is not legally mandatory.
Here are some common examples of public liability claims:
- A visitor slips on a wet floor in your warehouse and breaks an ankle.
- A contractor accidentally damages a client’s fit out while installing equipment.
- A customer trips on a café step and sustains a head injury.
- Your team knocks over and damages a client’s property while on site.
For a deeper look at what public liability insurance covers and whether your business needs it, see our guide to public liability insurance for SMEs.
What Is Product Liability Insurance?
Product liability insurance protects your business against claims for personal injury or property damage caused by a product you manufactured, imported, sold, supplied, installed or repaired, once that product has left your hands. Product can mean more than you might expect, it could be a builder’s completed work, a food item, imported structural steel or a piece of equipment a tradie has installed.
Here are some common examples of product liability claims:
- A customer is injured by a faulty product your business sold.
- A food item causes a customer to become ill.
- Equipment your business installed malfunctions and damages a client’s property.
- A defect in your completed building work causes injury or property damage.
For a deeper look at what coverage and whether your business needs it, see our guide to manufacturing insurance here, that overlaps significantly with public liability insurance.
Do You Need Both? Public and Product Liability Insurance?
You may need both public and product liability insurance if your business sells, makes or imports goods, installs products or hands over completed work, or if your contracts require product liability cover.
In practice, most businesses that supply anything physical end up needing both. In Australia, the two are almost always written together as a combined public and product liability policy, so the cost of adding product cover is usually small compared with buying it separately.
If you’re unsure which combination suits your operations, our Public and Product Liability service page can help you structure the right cover for your business and contracts.
Why Barrack Broking?
Understanding Your Liability Exposure
We’ll start by understanding your business and mapping your public and product liability risks so we can recommend the right level of cover rather than a one-size-fits-all policy.
Tailored Strategy and Recommended Sum Insured
Using our market expertise, we’ll recommend a tailored liability insurance strategy with clear options, limits, inclusions and costs.
Negotiate and Arrange Your Cover
We’ll negotiate with insurers to secure appropriate cover and terms based on your business, industry and identified risks.
Ongoing Support and Claim Management
Our service doesn’t end when the policy is placed. Our service continues all year round. Whether you need further claim information, policy clarification, or general advice, you can rely on us to support you.
Frequently Asked Questions
What’s the difference between public liability and product liability?
Public liability covers injury or damage from your business activities and premises; product liability covers injury or damage from products you supplied. In Australia, they’re usually combined in one policy.
Do Australian small businesses need public liability?
It’s not legally mandatory for most, but many landlords, councils, head contractors and clients often require it, and the financial exposure makes it standard practice.
Contact one of our insurance brokers today and we can clarify if public liability insurance is suitable for your needs.
How long can I be held legally responsible for liabilities from completed works?
You can be liable for years after completion. That’s why public and product liability cover can be important even after a project is finished, helping protect your business if a claim arises later.
Better Insurance Starts with Barrack Broking
We understand the difference it makes to have someone advocating for you when a liability claim arises.
Whether you’re reviewing your existing public and product liability cover or arranging it for the first time, our brokers can help you find protection that reflects the work you do, the products you supply and the risks your business faces.
Don’t wait until you make a claim to discover you’re underinsured. Talk to one of our expert insurance brokers today.