As a small business owner, one of the most important aspects to consider is insurance coverage. Public Liability insurance is a popular choice for businesses as it provides protection against potential claims for personal injury or property damage. However, the cost of this insurance can vary depending on several factors. In this article, we will explore the average cost of Public Liability insurance, the impact of different industries, the size of the business, the level of coverage, and the location of the business.
Average Monthly Premium for Public Liability Insurance
On average, small business owners can expect to pay around $63.53 per month for Public Liability insurance1. This figure is based on an analysis of over 110,000 businesses conducted by BizCover during the 2018/2019 financial year. It is important to note that this is a rough estimate and individual underwriting criteria may apply. To get a more accurate quote for your specific business, it is recommended to obtain an instant online quote.
Factors Affecting the Cost of Public Liability Insurance
The cost of Public Liability insurance can vary due to several key factors. These factors include the type and nature of your business, the turnover and size of your business, the amount of insurance cover required, and the location of your business. Additionally, the policy inclusions and exclusions, as well as the insurance provider chosen, can also impact the cost of the insurance.
Average Cost of Public Liability Insurance by Industry
The industry in which your business operates plays a significant role in determining the cost of Public Liability insurance. Different industries present varying levels of risk, which affects the premium charged by insurers. For example, cafes and restaurants are considered higher risk due to the potential for food poisoning, slips and falls, and scalds caused by hot liquids1. On the other hand, office-based businesses such as accounting firms or marketing agencies are generally considered less risky1.
The table below illustrates the average base premium for Public Liability insurance by industry1:
| Industry | Average Base Premium |
|---|---|
| Wholesale, pharmacies, and retail | Highest |
| Trades and services | Medium |
| Office-based businesses | Lowest |
Public Liability Insurance for Tradesmen
Tradesmen, who operate in the Trades and Services industry, experience varying levels of risk depending on the specific occupation. For example, commercial cleaning businesses are often considered high risk due to the potential for bodily injury caused by cleaning activities in public spaces1. While premiums can vary greatly based on trade-based occupations, it is important for tradesmen to have adequate insurance coverage to protect against potential claims.
The Size of the Business and its Impact on Premium
The size of a business can have an impact on the cost of Public Liability insurance. Insurers consider the number of employees and the amount of revenue generated by the business when determining premiums. Generally, the more employees a business has, the higher the potential risk for accidents or damage. For example, a real estate agency that expands from 3 employees to 10 employees has a higher chance of incidents occurring during property visits1. Revenue also plays a role, especially for office-based businesses1.
The Level of Cover and its Effect on Premium
The level of cover chosen for Public Liability insurance can also affect the premium. While it may seem intuitive that higher coverage amounts would result in higher premiums, the increase in cost is not proportional. Increasing the coverage does not mean doubling the premium. The most popular level of cover among businesses is $10 million, but some businesses opt for $5 million or even higher amounts depending on industry requirements and risk exposure1.
The table below presents the average monthly costs of Public Liability insurance based on the coverage level1:
| Coverage Level | Number of Customers | Average Premium (Monthly) |
|---|---|---|
| $5 Million | 26369 | $45.9 |
| $10 Million | 46415 | $57.1 |
| $20 Million | 36219 | $91.1 |
Impact of Business Location on Premium
The location of your business can impact the cost of Public Liability insurance due to varying levels of stamp duty charged by different states and territories. Stamp duty, ranging from 0% to 11%, is applied to insurance premiums, with the rate determined by the state in which your business is based1. According to BizCover’s data, businesses in New South Wales and Queensland have higher average base premiums, which can be attributed to the higher perceived risk in those regions1.
The table below shows the average cost of Public Liability insurance by state or territory1:
| State | Average Monthly Premium |
|---|---|
| New South Wales | $67.94 |
| Victoria | $67.32 |
| Queensland | $68.27 |
| Western Australia | $54.57 |
| South Australia | $55.61 |
| Tasmania | $50.61 |
| Australian Capital Territory | $59.02 |
| Northern Territory | $55.81 |
Conclusion
Public Liability insurance is an essential safeguard for businesses, protecting against potential claims for personal injury or property damage. The cost of this insurance can vary based on factors such as the type of industry, the size of the business, the level of coverage, and the location of the business. While the average monthly premium for small businesses is around $63.53, it is important to obtain a personalized quote to accurately determine the cost for your specific business. By understanding these factors and evaluating your business’s risk exposure, you can make an informed decision about the appropriate level of coverage to protect your business and its stakeholders.