Public liability insurance is the most fundamental type of business insurance for New Zealand businesses that deal with customers, operate on third-party premises, or sell products to the public. Here’s everything you need to know.
What Is Public Liability Insurance?
Public liability insurance covers your legal liability if your business activities cause:
- Bodily injury to a third party (a customer, visitor, or member of the public)
- Property damage to a third party’s belongings
It covers the legal costs of defending a claim and any damages awarded — up to the policy limit.
Example: A customer visits your retail store and slips on a wet floor, breaking their wrist. They sue you for medical costs, lost income, and pain and suffering. Public liability covers your legal defence and the payout.
Example: You’re a tradesperson working in a client’s home. You accidentally drop a tool through their kitchen bench, damaging both the bench and a pipe below, causing water damage. Public liability covers the claim.
What Public Liability Does NOT Cover
- Your own employees — covered under ACC for workplace injuries; employers liability is separate
- Professional advice or design errors — covered by professional indemnity insurance
- Damage to your own property or equipment — covered by business property insurance
- Motor vehicle accidents — covered by commercial motor vehicle insurance
- Deliberate or criminal acts
- Contractual liability beyond what the law would impose
ACC and Public Liability — The NZ Distinction
In New Zealand, ACC means that personal injury claims work differently than in most other countries. ACC provides no-fault injury compensation — meaning injured parties generally can’t sue for personal injury damages in NZ.
This has important implications for public liability:
- A customer injured in your premises generally can’t sue you for personal injury damages (ACC handles that)
- However, they can still sue for property damage, economic loss (e.g., lost income not covered by ACC), and in limited circumstances where ACC doesn’t apply
- Overseas visitors — ACC covers their accident injuries while in NZ, but this is still complex territory
Despite the ACC safety net, public liability insurance is still strongly recommended — claims for property damage, non-personal-injury losses, and defence costs still arise.
How Much Public Liability Cover Do You Need?
Standard public liability limits in NZ:
| Limit | Best for |
|---|---|
| $1 million | Small businesses, low-risk activities |
| $2 million | Most SMEs, typical commercial leases |
| $5 million | Larger events, higher-risk activities, government contracts |
| $10 million+ | Construction, large-scale operations, specified contracts |
Many commercial leases and client contracts specify a minimum public liability requirement — commonly $2 million or $5 million. Check any contracts before choosing your limit.
Government and council contracts often require $5–$10 million minimum. Large commercial tenants may require $10 million+.
What Does Public Liability Insurance Cost?
Premiums depend on:
- Business type and risk profile
- Annual revenue
- Number of employees
- Sum insured
- Claims history
Indicative annual premiums for NZ businesses:
| Business type | $1M cover | $2M cover |
|---|---|---|
| Office-based consultant/professional | $300–$600 | $400–$800 |
| Retail shop | $500–$1,200 | $700–$1,500 |
| Tradesperson (builder, electrician) | $700–$2,000 | $900–$2,500 |
| Event organiser | $800–$3,000 | $1,200–$4,000 |
Premiums are indicative and vary significantly by insurer. Get multiple quotes.
Product Liability
If your business manufactures, imports, or sells physical products, product liability cover (often included in or an extension of public liability) covers injury or damage caused by a product defect.
If you sell products online or through retail, ensure your public liability policy includes products cover — and check whether it covers exported products if you sell internationally.
Where to Get Public Liability Insurance in NZ
Most commercial insurance brokers can arrange public liability insurance from multiple underwriters. Key commercial insurers in NZ include:
- NZI (part of IAG)
- Vero (part of Suncorp)
- QBE
- Allianz
- Zurich
- Initio (for some business lines)
For straightforward needs, some direct online platforms now offer small business public liability — but brokers remain the primary channel for business insurance in NZ.
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