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GENERAL LIABILITY INSURANCE

It’s important you understand how much liability insurance you need. This will depend on your occupation, risk exposure and legal requirements.

What is General Liability Insurance and how much do I need?

General Liability insurance, also known as Public Liability or Broadform Liability Cover, is a type of insurance that provides coverage for legal liability arising from third-party claims for bodily injury or property damage caused by your business operations or activities.

General Liability Insurance cover helps protect your business from financial losses in the event that someone sues you for injury or damage they believe your business is responsible for.

In New Zealand, public liability insurance is not a legal requirement, but it’s highly recommended for businesses, particularly those that interact with the public or operate in public spaces as it can provide coverage for legal fees, compensation payments, and other additional costs associated with defending a or settling a claim.

The amount of Public Liability insurance you need depends on criteria such as, what is the nature of your business, its size, the level of risk associated with your operations, and any regulatory requirements or contractual obligations you may have.

What to consider when assessing your General Liability Insurance needs:

  1. Assess your risks: Identify the potential risks and liabilities associated with your business activities.
  2. Consider industry standards: Research industry benchmarks and standards to get an idea of the typical coverage limits recommended for businesses similar to yours.
  3. Review contractual requirements: If you have contracts with clients, suppliers, landlords, or other parties, review the insurance requirements specified in these contracts

What doesn’t Public Liability Insurance cover?

Public liability insurance does a great job of protecting your business against injury claims, loss or damage claims made by a third party as a result of your negligence, and with most policies that will extend to cover your products (if Broadform or Product Liability is included) However, there are several common business scenarios where the policy may not cover you.

    • Faulty Workmanship
    • Injury or damage to you of your property
    • Loss or Damage as a result of your professional advice
    • Damage or injury as a result of motor vehicle claims

Example of a General Liability Insurance claim:

A builder was on site doing renovations.

The builder’s employee was carrying a ladder to the site and accidentally smashed a window on the client’s house.

The builder was then able to have the damage claimed under his Public Liability Insurance due to the third party property damage.

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