FAQs

For many licensed trades, such as building, plumbing, and electrical work, Public Liability insurance is often a compulsory requirement under state or territory licensing regulations. The specific level and type of cover required can vary depending on your occupation and where you operate. 

Even where Public Liability insurance is not legally mandated, choosing to operate without it can expose you to substantial financial risk. If your business activities result in injury to a third party or damage to someone else’s property, you may be personally responsible for the associated costs, putting both your business and personal assets at risk. 

Public Liability (PL) insurance is not universally required by law for every Australian business. However, there are a number of situations where maintaining this cover is a condition of operating. 

Licensing Requirements: Certain occupations regulated by state or territory authorities require PL insurance as part of their licensing obligations. For instance, electrical contractors in Queensland must hold an appropriate PL policy to obtain or renew their licence. 

Contractual Obligations: Businesses may also be required to carry PL insurance under the terms of a contract, lease, or service agreement. Commercial property owners, local councils, and principal contractors commonly specify minimum levels of cover before granting access to premises or work sites. 

Regardless of whether it is a legal or contractual requirement, Public Liability insurance provides valuable protection against claims arising from third-party injuries or damage to property caused by your business activities. 

If your business activities result in injury to a customer, visitor, client, or other member of the public, you could be legally obligated to cover compensation payments, legal expenses, and other associated costs. In the absence of Public Liability insurance, these financial obligations would need to be met directly by your business, potentially placing significant strain on its resources. 

If your business interacts with customers, clients, or members of the public, or if your operations have the potential to cause damage to someone else’s property, Public Liability insurance should be considered. This type of cover can help protect your business from the financial consequences of third-party injury or property damage claims arising from your activities. 

Public Liability insurance cover levels generally fall between $5 million and $20 million, with $10 million commonly regarded as the standard requirement for many small businesses. The appropriate level of cover will vary depending on factors such as the nature of your industry, any contractual obligations, and relevant licensing conditions. 

Contracts and Leases: Landlords, principal contractors, and government agencies often require a minimum level of Public Liability insurance—commonly around $20 million—before you are permitted to begin work or enter into a lease agreement. 

Licensing Requirements: In some industries, holding a minimum amount of cover is a condition of obtaining or maintaining a licence. For example, electricians in certain states may be required to carry at least $5 million in Public Liability insurance. 

Risk Exposure: Businesses operating in higher-risk environments, such as construction sites or arborist work, or those frequently interacting with the public, should consider higher coverage limits to ensure adequate protection against potential claims. 

Professional indemnity insurance (PII) is designed to protect professionals and businesses that provide advice or services. It helps cover the financial costs if a client claims that an error, oversight, or act of negligence in your work caused them a financial loss. 

Professional Indemnity (PI) insurance helps protect service-based businesses if a client makes a legal claim alleging negligence, mistakes, omissions, or a failure to meet professional responsibilities. It covers expenses such as legal defence costs, investigations, and any compensation or damages that may be awarded to the client. 

In Australia, professional indemnity (PI) insurance typically costs around $40 to $250 per month (about $480 to $3,000 per year) for standard coverage of $1 to $10 million. That said, the actual price can vary quite a bit depending on factors like your industry, business income, number of employees, and whether you’ve had any past claims.

• Healthcare professionals – Allied health practitioners such as physiotherapists, psychologists, and chiropractors must maintain cover to stay registered with Ahpra.  

• Legal practitioners – Solicitors and barristers generally need PI insurance to practise, with limited exemptions in some government or community roles.  

• Financial and tax agents – Accountants, tax agents, and bookkeepers are required to hold cover under the Tax Practitioners Board.  

• Real estate agents – Property agents, sales representatives, and auctioneers must have PI insurance in many states, including NSW, to operate legally.  

• Brokers – Insurance and mortgage brokers are required to hold PI insurance as part of their licensing conditions.  

• Migration agents – Registered migration agents must legally carry PI insurance.  

• Building and construction professionals – Architects, draftspeople, and some licensed trades (such as plumbers in VIC and electricians in QLD) are also required to hold cover. 

Professional Indemnity (PI) insurance protects you against claims of negligence, errors, or omissions in your professional advice or services. However, there are several common exclusions to be aware of: 

• Fraud, dishonesty, and illegal acts – It does not cover deliberate wrongdoing, criminal activity, fraud, theft, or malicious conduct by you or your staff.  

• Bodily injury and property damage – Physical injury or damage to property is generally excluded and is usually covered under Public Liability insurance (with limited exceptions where it directly results from professional advice, such as faulty designs).  

• Business and financial losses – This includes trading debts, unpaid invoices, insolvency, or having to refund your own professional fees.  

• Contractual and employment issues – It typically excludes liabilities taken on beyond your normal duty of care under contract, as well as employment-related claims like unfair dismissal, discrimination, or workplace injury claims. 

Whether you need Professional Indemnity (PI) insurance depends on the type of work you do and any contractual requirements you have. If your role involves providing advice, professional services, or design work, having PI insurance is usually important as it helps protect you against claims arising from negligence, mistakes, or omissions. 

You may need Professional Indemnity (PI) insurance if your work involves: 

• Providing advice or consultancy services – such as business consulting, accounting, or public relations, where clients rely on your professional expertise.  

• Preparing designs or specifications – including professions like architects, engineers, and building designers, who are subject to strict regulatory and safety obligations.  

• Meeting legal or regulatory requirements – certain professions, including legal practitioners, tax agents, and healthcare professionals, are often required to hold PI insurance to maintain their registration or licence.  

• Working under client contracts – many clients require proof of adequate PI cover, usually in the form of a certificate of currency, before engaging your services.