Whether you’re a skilled tradie stepping out on your own, a passionate foodie opening a local cafe, or just about to launch a mobile pet grooming service, you may have heard that something called “public liability insurance” is essential for a small business. But figuring out whether you legally need it can be surprisingly complicated.
That’s because public liability requirements can vary widely in Australia depending on where your business operates and what industry you work in. That skilled tradie, for example, may need public liability insurance to meet licensing rules, while the cafe owner might need it to secure an outdoor dining permit from their local council.
So, what exactly is public liability insurance? Is it compulsory for the type of business you’re opening? And even if it’s not, what might happen if you don’t have public liability cover?
To help you understand how public liability insurance in Australia fits into the broader small business insurance picture, and what your legal requirements might be, we’ve put this guide together to answer those questions and more.
What is public liability insurance?
Public liability insurance is a type of business insurance.1
It’s designed to cover your business if someone gets injured or their property gets damaged because of your or your business’s negligence.1
For example, it might cover your liability if someone slips over and hurts themselves while they’re in your shop or if you damage someone’s property while you’re on the job as a tradie.
Public liability insurance is useful for any business that interacts with people face to face, including if customers or members of the general public visit your business or if you visit customers’ premises.2
Is public liability insurance mandatory in Australia?
For some industries and business types, yes, public liability insurance is mandatory no matter where they operate in Australia.3,4
Public liability insurance is also a mandatory licensing requirement for some types of trade-based businesses, depending on the state or territory they’re operating in.5,6
Most commercial lease agreements stipulate public liability insurance as a requirement for the business renting the property,7 while local councils often require it to be in place before they’ll issue specific permits, including outdoor dining permits for hospitality businesses.8,9
But, even if it’s not mandatory in your industry – or required for a council-issued permit or lease agreement – business owners can still be held legally responsible for damage or injuries to another person or property if they’re found to be negligent.10
It means that if someone’s injured or their property gets damaged as a result of your business activities, you might find yourself the subject of a legal claim for loss or damage – and without insurance, the cost of that might close some small businesses down.11
Who is public liability insurance mandatory for in different states?
Your business may need to have public liability insurance in place in order to sign a lease or secure a council permit regardless of the industry or location you’re operating in. But here’s an idea of some businesses it’s legally mandated for as part of state or territory licensing requirements, in addition to any national requirements.
| Location | Businesses that need public liability insurance to obtain or renew a licence |
| Public liability insurance in Qld |
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| Public liability insurance in NSW |
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| Public liability insurance in WA |
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| Public liability insurance in SA |
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| Public liability insurance in Vic |
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| Public liability insurance in ACT |
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| Public liability insurance in Tas |
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For trades and occupations that aren’t listed for your state or territory, you might like to double check with your national or state industry body to see if you’re legally required to have public liability insurance.
Do I need public liability insurance for a home-based business?
Maybe. If your customers or the general public visit you at home – or you regularly visit your customers’ premises – then you might want to consider getting public liability insurance cover.2
Do I need public liability insurance as a sole trader?
You might. If your profession is legally required to have public liability insurance or you interact with your customers in person then, even as a sole trader, you might like to consider exploring cover.2
Is public liability and workers compensation insurance the same thing?
No – don’t make the insurance mistake of confusing the two.
While public liability insurance covers claims for injury or property damage made by your customers, suppliers or members of the public, workers compensation insurance covers your employees if they get injured or sick because of work.1,2
If your business employs staff, workers compensation insurance is required from the workers compensation regulator in your state or territory:1
- ACT: WorkSafe ACT
- NSW: State Insurance Regulatory Authority
- NT: NT WorkSafe
- Qld: WorkCover Queensland
- SA: ReturnToWorkSA
- Tas: WorkSafe Tasmania
- Vic: WorkSafe Victoria
- WA: WorkCover WA1
What else isn’t covered by public liability insurance?
As well as not covering your workers if they get injured or sick due to work, there are other business-related risks that public liability insurance doesn’t cover either.1
For example, it’s different to products liability insurance. If your business makes, sells or supplies goods, this covers you if one of your products injures someone or damages their property.1
Public liability insurance also doesn’t cover your business for events such as theft, damage to your property, loss of stock or if a covered event causes an interruption to your operations.1 Public liability cover is not the same as professional indemnity insurance either. That helps cover professionals in many industries against civil liability claims made in relation to their advice or services.1,2
“When you’re running a small business, public liability insurance may be just the starting point,” says Mervyn Hartley, Youi’s Head of Product – Home and Small Business.
“You may also need to consider a few other types of business insurance, depending on the industry you’re working in or the type of business you’re operating.”
With Youi’s Small Business Insurance, public and product liability insurance is included as standard with every policy.21
“From there, there are a number of optional covers you can add to a Small Business Insurance policy at Youi, for an additional cost,” explains Hartley.
These include cover for:
- Business interruption – If an unexpected event forces you to temporarily close your doors, this helps cover your lost profit and extra operating costs.22
- Business property damage – Under this option, contents and/or stock in trade at your business premises may be covered for loss or damage caused by an accident or unforeseen event, such as a fire, storm, flood or theft. Stock in trade could also be covered while it’s in transit to or from your business, and refrigerated food is covered for deterioration.23,24
- Business items – This option covers loss or damage to your portable business items, including electronic devices and tools of trade, anywhere in the world.25
- Money – Your business cash may be covered for loss or damage with this optional cover.26
- Glass – There’s also the option to add cover for loss or damage to the glass you’re responsible for at your business premises,27 which may include glass windows if you’re leasing.28
- Professional indemnity – With this option, you may be covered for civil liability claims or inquiries that arise from the professional advice or specialist services you provide to clients.22
- Tax audit – This option provides cover for the professional fees and charges you might face if your business is audited.22
What does public liability insurance cost?
“The cost of a Small Business Insurance policy with Youi will be determined by factors such as the amount of business liability cover you choose and if you’ve added any of our optional covers to the policy,” says Hartley.
“Your business type and location and whether or not you employ staff are other factors we take into consideration.
“To get an accurate idea of how much Small Business Insurance might cost, you might like to consider starting a quote with us.”
How do I get a public liability insurance quote?
At Youi, you can start a quote for Small Business Insurance online or by giving our dedicated business insurance team a call on 1300 010 648.
How much public liability insurance cover do I need?
“The amount of public liability insurance coverage that your business might need can depend on a number of factors,” says Hartley.
These can include the typical activities your business usually performs, whether you regularly work on high-value customer property, and how much access the public has to your business.11
“At Youi, we offer flexible liability limits to suit different business needs,” says Hartley. “You can choose from three levels of business liability cover – $5million, $10million and $20million.”
Navigating the administrative red tape of running a small business may feel overwhelming, especially when you’re trying to figure out how public liability insurance for small businesses works in Australia, and whether it’s a good – or necessary – choice for your business.
If you’d like to learn more about the public liability cover provided by Youi’s Small Business Insurance, or if you’re reviewing your current level of cover, why not consider giving our team a call on 1300 010 648 or starting a quote online.
1 Source: Australian Government – Types of business insurance, n.d.
2 Source: Business Victoria – Find the right insurance, October 2022
3 Source: NSW Government – Education and Care Services National Regulations (2011 SI 653), September 2025
4 Source: DSC – Ask DSC: what insurance do I need as a registered NDIS provider?, April 2024
5 Source: Qld Government WorkSafe – Licensed electrical contractors, March 2025
6 Source: Building and Plumbing Commission – Insurance requirements for licensed plumbers, November 2020
7 Source: APNL Accountants & Advisors – 5 Clauses Tenants Should Look For When Reviewing a Lease, n.d.
8 Source: Brisbane City Council – Footpath and outdoor dining permits, n.d.
9 Source: City of Sydney – Outdoor dining guidelines, July 2025
10 Source: NSW Government Service NSW – Get liability insurance for your business, July 2025
11 Source: Victorian Chamber of Commerce and Industry – Public liability insurance for SMEs: Do you need it?, February 2026
12 Source: Master Builders Association New South Wales – Design and Building Practitioners Act and Regulation: New insurance requirements from 1 July 2023, September 2022
13 Source: WA Government – Electrical contractor’s licence – Application, January 2026
14 Source: SA Government – Work & Business Licences, n.d.
15 Source: Energy Safe Victoria – Registered Electrical Contractors (REC), December 2025
16 Source: Building and Plumbing Commission – Insurance: Building insurance requirements, n.d.
17 Source: ACT Government Access Canberra – Business and work, n.d.
18 Source: Tas Government Consumer, Building and Occupational Services – Builder licence, February 2025
19 Source: Tas Government Consumer, Building and Occupational Services – Plumbing licence – contractor, February 2025
20 Source: Tas Government Consumer, Building and Occupational Services – Electrical licence – contractor, February 2025
21 Exclusions, limits and additional fees may apply. For full details, see the Small Business Insurance PDS.
22 An additional cost applies for optional covers. Conditions, limits and exclusions apply. For full details, see the PDS & Policy Wording.
23 Business Property Damage cover is optional and an additional cost applies. Conditions, limits and exclusions apply. For full details, see the PDS & Policy Wording.
24 Loss or damage caused by flood, storm or bushfire within the first 72 hours of your policy commencing is only covered in limited circumstances.
25 Business Items cover is optional and an additional cost applies. Conditions, limits and exclusions apply. The most we will pay for each item is $2,500, up to a total of the Business Items amount noted on your policy schedule per claim, unless a High Value Business Items amount is noted on your policy schedule. In this case the most we will pay for all items with a replacement value of more than $2,500 is the High Value Business Items amount shown on your policy schedule.
26 Money cover is optional and an additional cost applies. Conditions, limits and exclusions apply. The most we will pay for each claim is the insured value for your business’s money. For full details, see the PDS & Policy Wording.
27 Glass cover is optional and an additional cost applies. Conditions, limits and exclusions apply. For full details, see the PDS & Policy Wording.
28 Source: Queensland Small Business Commissioner – Repairs and maintenance, n.d.
