Public and Product Liability and Professional Indemnity

If a customer suffers an injury while visiting your premises, your business might be liable.

Public liability

A business that relies upon members of the public visiting the workplace, such as cafés or hair salons, has a responsibility to those visiting or engaging in activities on the premises. In the same way, a business that requires its employees to visit a customer's property, such as electricians or gardeners, also has a responsibility to the customer whose premises are being visited. This responsibility falls under public liability.

There are two types of public liability which can affect a business: strict liability and duty of carei. Strict liability is usually determined by a contract or imposed by statute law, whereas duty of care is a principle that refers to the responsibility that is owed to a client or third party by the insured businessi. In both cases, liability occurs when the contract, law or obligation is breachedi.

The client or third party may claim 'injuries' when a breach of strict liability or duty of care has occurredi. 'Injuries' may refer to physical injury, such as from a fall or food poisoning; mental injury, resulting from discrimination, harassment or defamation, to name a few; or property damagei. To make this claim, the injured person or organisation needs to prove that a duty of care existed and was subsequently breached by the business, and that material damage was also caused by this breachi.

A claim against a business can be a costly and time-consuming experience. It's important to reduce the risk of liability and the risk of a client or third party making a claim against your business. The first step is to identify, manage and prevent any risks within your businessi. The second step is to take out public liability insurance.

Public liability insurance covers your business if it is held accountable for a third party injury or property damageii. It aims to protect you for amounts which you are liable to pay if your business is found to be negligentii. It can financially compensate third parties for death or injury, loss or damage of property, or economic loss that has occurred as a result of your business' negligenceii. Without public liability insurance, your business may find itself unable to afford the expenses of paying damages or legal assistance.

A business which sells, supplies, delivers, manufactures or repairs a product has strict liability to its customers that the product is free from safety defects.

Product liability

A business which sells, supplies, delivers, manufactures or repairs a productiii has both strict liability and a duty of care to its customers that the product is free from safety defects. A product is considered to be defective or unsafe if it does not provide the level of safety that the consumer is generally entitled to expectiv. A claim for product liability can be made when these products prove to be faulty and have caused injury, death or damage to a third partyiii.

Product liability insurance protects your business if the product that you sell, supply, manufacture or repair proves to be defective or is capable of causing injury to consumers. It can financially protect your business if consumers seek compensation or damages for personal injury or loss caused by the faulty productiv.

Professional indemnity

A professional is anyone who is considered by their clients to be qualified and skilledv. Professionals must adhere to professional standards and display duty of care towards their clients. If a breach of professional duty occurs, and a professional's advice, treatment or service is found to be negligent, a business may be liable for the material and financial losses or physical injuries incurred by a third party that are associated with the failure to uphold professional standards and duty of carev.

Professional indemnity insurance provides protection for professionals in various industries, including but not exclusive to legal professionals, accountants, stockbrokers, medical practitioners, engineers, and consultantsv. This insurance can protect your business from the financial and legal losses associated with third party claims.

Allianz offers Public and Products Liability Insurance to protect your business in the event of a claim being taken out by a third party. Public and Products Liability offers a limit of indemnity up to $20 million and can protect your business from financial loss. For more details on Professional Indemnity contact your Allianz broker.

i Business Victoria 2013, Public liability, Victorian State Government, viewed 23 September 2013,

ii Allianz Australia, Public and Products Liability, viewed 23 September 2013,

iii, Liability insurance, Australian Government, viewed 23 September 2013,

iv Product Safety Australia, Product liability, Australian Competition and Consumer Commission, viewed 23 September 2013,

v Business Victoria 2013, Professional indemnity, Victorian State Government, viewed 23 September 2013,