Public liability insurance cost in Australia: what you pay for and how to compare

The cost of public liability insurance in Australia depends mainly on what your business does, how big it is, the limit you choose and your claims history, with 10% GST and state stamp duty added on top. There is no standard price: a bookkeeper working from home and a roofing contractor can both buy a "$20 million public liability" policy and pay premiums that differ many times over, because the insurer expects very different claims. To compare fairly, ask every insurer or broker to quote the same activities, turnover, limit and excess, then compare the total payable and the exclusions, not the headline premium.

This guide is the overview for the costs and rules section. Every premium below is an illustrative example, not a market rate.

What a public liability premium pays for

A public liability policy pays compensation and legal costs when your business activities cause injury to a third party or damage to their property, and you are legally liable. It does not pay for your own property, your own injuries, your employees' injuries (that is workers compensation) or financial loss caused by advice (that is professional indemnity).

The premium you are quoted is usually made up of several parts:

For how the two taxes combine, see GST and stamp duty on business insurance.

The factors that move the price most

Insurers rate liability risk in broadly similar ways, although each weights the factors differently. The ones that usually matter most are:

• Occupation and activities. Insurers classify the business, often using industry codes such as ANZSIC, and then load or exclude higher-risk activities like working above a set height, hot works, demolition or crowd events.
• Size. Turnover is the usual measure, sometimes with wages or the number of staff. More work generally means more exposure.
• Subcontractors. Payments to uninsured subcontractors may be added to your rating base, because claims caused by their work can fall back on you.
• Claims and incidents. A record of claims, even small ones, typically raises the price or the excess.
• Limit of liability. A $20 million limit costs more than $10 million, but usually not twice as much, because most claims are far below either limit.
• Excess. A higher property damage excess lowers the premium.
• Products and territory. Selling or importing goods, and especially exporting to the USA or Canada, changes the risk.

The guide to what sets business liability premiums goes through each factor with examples.

Worked example: why two quotes differ

Take an illustrative electrical contractor in Queensland with $600,000 turnover and two subcontractors who hold their own cover. Three quotes come back for a $20 million limit:

Quote 2 has the lowest base premium, but it has the highest excess and excludes work above 10 metres, which matters if the contractor ever wires commercial buildings. Adding the broker fee also narrows the gap. The worked quote comparison shows how to turn this kind of table into a single total for a claim scenario.

Which covers you might need alongside public liability

Public liability is often only one part of a business's insurance. The guides in this section cover:

• public liability versus professional indemnity, for businesses that give advice or design work as well as physical work;
• product liability for importers and sellers, including the Australian Consumer Law rules that treat some importers as manufacturers;
• which business insurance is compulsory, such as workers compensation and some professional indemnity;
• business packs versus standalone liability, for shops and offices;
• how the Insurance Contracts Act 1984 applies to business policies, including the duty of disclosure.

Rules that apply in 2026

A few legal points shape how business liability insurance is sold and claimed:

• Duty of disclosure. Business policies are generally not "consumer insurance contracts", so the duty of disclosure in section 21 of the Insurance Contracts Act 1984 still applies. The narrower duty to take reasonable care not to misrepresent, which replaced it for consumer policies from 5 October 2021, does not apply to most business cover.
• Unfair contract terms. Since 5 April 2021 the unfair contract terms protections in the ASIC Act have applied to insurance contracts covered by the Insurance Contracts Act, including small business contracts. Since 9 November 2023 using or relying on unfair terms in a standard form contract can attract penalties.
• Claims handling. Since 1 January 2022 handling and settling insurance claims is a financial service regulated by ASIC.
• Complaints. Insurers must have internal dispute resolution and belong to AFCA, which can deal with complaints from small businesses.

Mistakes that make the cheapest quote expensive

• Describing the business too narrowly to get a lower price, then making a claim on an activity that was never disclosed.
• Choosing a limit lower than a lease or head contract requires, and being shut out of work.
• Ignoring the excess, which applies to every property damage claim on many policies.
• Paying by premium funding without checking the total amount payable.
• Letting the policy lapse between renewal and payment.

Frequently asked questions

How much does public liability insurance cost for a sole trader?

It depends on the occupation, turnover, limit and claims history, so no single figure is reliable. Low-risk office-based sole traders usually pay far less than trades working on building sites. Get at least two or three quotes for the same cover, and use the quote comparison tool to compare totals.

Is the premium tax deductible?

For a business, public liability premiums are generally a deductible business expense. GST-registered businesses can usually claim the GST as an input tax credit. Check your position with the Australian Taxation Office or a registered tax agent.

Does a $20 million limit cost twice as much as $10 million?

Usually not. Most claims are small compared with either limit, so the extra layer of cover is typically priced much lower than the first. Compare the actual quotes.

Can I get cover for a single event?

Yes, many insurers offer short-term event or market stall cover. If you trade at several events a year, an annual policy can work out cheaper.

Sources

• ASIC — regulator of insurance conduct, brokers and claims handling
• APRA — register of authorised general insurers
• Federal Register of Legislation — Insurance Contracts Act 1984 and ASIC Act 2001
• AFCA — external dispute resolution for small business insurance complaints
• business.gov.au — government guidance on business insurance types