Public Liability Insurance for New NZ Companies: What You Need to Know
Public liability insurance protects your business if a client, visitor, or member of the public is injured or suffers property damage because of your business activities. Here is what new NZ companies need to understand.
What public liability insurance covers
Public liability (PL) insurance pays for legal costs and compensation if your business is found responsible for:
- Bodily injury to a third party (a client, visitor, or member of the public)
- Property damage to someone else's belongings or premises
- Advertising injury or personal injury claims related to your business activities
It does NOT cover injury to your own employees (that is covered by ACC in NZ), damage to your own property, or professional errors and omissions (that requires professional indemnity insurance).
Is public liability insurance compulsory in NZ?
Public liability insurance is not legally required for most NZ businesses. However, it is often a contractual requirement. Common situations where it is mandatory include:
- Tradespeople working on construction sites (most principal contractors require it)
- Businesses renting commercial premises (landlords often require it in the lease)
- Vendors and exhibitors at markets, events, or fairs
- Government or council contracts
How much cover do you need?
Most NZ small businesses start with NZ$1 million to NZ$2 million in public liability cover. Higher-risk industries (construction, events, food service) typically carry NZ$5 million or more. Your insurance broker will assess your specific risk profile.
How much does it cost?
A basic NZ public liability policy for a low-risk small business starts from around NZ$400 to NZ$800 per year. Trades and higher-risk businesses pay more. Bundling with business contents insurance or professional indemnity often reduces the total premium.
When to get it
The best time to arrange public liability insurance is before you start operating, particularly before you sign any contracts, lease commercial premises, or work on client sites. Do not wait until a client asks for a certificate of currency.
Finding the right broker
An insurance broker can compare policies from multiple underwriters and advise on the right level of cover for your specific business. Use the FreshFirms Connect directory at freshfirms.nz/connect to find a business insurance broker in your region.