Public and product liability insurance
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What is public and product liability insurance?
Public liability insurance covers your business if an accident causes injury or property damage to someone outside the business, such as a client, visitor or member of the public. Product liability insurance responds when a product your business designs, manufactures, assembles or supplies causes that same kind of harm, and for manufacturers and wholesalers, it can apply to how a product is used well beyond the original point of sale.
For engineering and steel fabrication businesses in particular, cover isn't limited to finished goods. Under most policies, the work itself is treated as the product, so a fabricated component or an on-site installation can trigger a claim in much the same way a manufactured item would, even years after the job is complete.
Both risks are more common, and more costly, than many businesses expect. Gross written premium for public liability insurance across Australia's APRA-regulated insurers has risen by around 40% since 2015, driven largely by an increase in large claims. Separately, businesses must notify the Australian Government within two days of starting a product recall, a reminder of how quickly a product safety issue can escalate once it's identified.
Public and product liability insurance is designed to cover exactly this combination of exposures, whether the claim relates to an incident on site or a product already in a customer's hands.
What's covered by public and product liability insurance
Public and product liability is often combined into a single policy, but what's included, and where public liability ends and product liability begins, can vary by insurer. Your broker can confirm what applies to a specific policy and what else can be added to your cover.
Cover for claims of injury to a client, visitor or member of the public caused by the business's operations.
Cover for claims of damage to property belonging to someone outside the business.
Cover for claims that a product the business designs, manufactures, assembles or supplies has caused injury or property damage.
Cover for claims arising after a job is finished, since under most policies the work itself is treated as the product.
Cover for the cost of investigating, defending and settling a claim, in addition to any compensation awarded.
Why you might need public and product liability insurance
Public and product liability policy types
Public and product liability is usually combined into a single annual policy providing one limit for both types of claim, rather than bought as separate policies. Businesses that manufacture, fabricate or supply higher-risk products may need higher limits or specific product liability extensions beyond a standard combined policy.
Public and product liability key considerations
Product liability doesn't respond to a product simply underperforming or failing to do what it was sold to do — that's a warranty or contractual issue, not an insurable loss. It's also worth checking cover remains in place for products or work already supplied even after a business changes structure, stops making a particular product or closes down, since a claim can surface well after the fact. Reviewing this with your broker as the business and its product range evolve means there's time to close any gaps.
Where the job ends, the exposure doesn't
A claim doesn't need to happen on site to land on your desk — a product already in a customer's hands, or work finished months ago, can trigger a claim just as easily as an accident happening today. Public and product liability insurance is designed to cover both ends of that exposure, on site and long after the job's done.
Ask your broker how the policy treats completed work, whether your limit is high enough for the products or components you supply, and what happens to cover for past work if the business changes structure or stops making a particular product.
Let's get you covered
