Frequently Asked Questions | Gerrards Insurance

Q: What's the difference between public liability and professional indemnity insurance?

Public Liability Insurance covers physical injury or property damage caused by your business operations. For example, a customer injured on your premises or damage to a client's building during your work. Professional Indemnity Insurance covers financial loss caused by professional advice, services, or errors. For example, an accountant giving incorrect tax advice that costs a client money, or a consultant's recommendation that leads to business losses. Many New Zealand businesses need both types of coverage. Public liability protects against physical risks, while professional indemnity protects against advice and service-related claims.

Question 1

What is public liability insurance?

Accepted Answer

Public liability insurance protects New Zealand businesses against claims from third parties for bodily injury or property damage that occurs as a result of your business operations. This coverage includes legal defence costs and compensation payments if your business is found liable.

For example, if a customer slips and falls in your retail store, or if your work damages a client's property, public liability insurance would cover the associated costs.

Question 2

How much does public liability insurance cost in New Zealand?

Accepted Answer

The cost of public liability insurance in New Zealand varies based on several factors:

Industry and risk level: Higher-risk industries like construction typically pay more than office-based businesses
Coverage amount: Policies range from $1 million to $20+ million in coverage
Business size: Annual turnover and number of employees affect premiums
Claims history: A clean claims history can reduce costs

Most small businesses pay between $500-$2,000 annually, though costs can be higher for specialized industries. Contact Gerrards Insurance for a personalized quote based on your specific business needs.

Question 3

Do I legally need public liability insurance in New Zealand?

Accepted Answer

Public liability insurance is not legally required in New Zealand for most businesses. However, it is highly recommended and often practically required in these situations:

Many clients and contracts require proof of public liability coverage before engaging your services
Landlords often require it as a condition of commercial lease agreements
Industry regulations or professional bodies may mandate it for certain sectors
Without it, your business assets are at risk if a claim is made against you

While not mandatory by law, the financial protection it provides makes public liability insurance an essential part of business risk management in New Zealand.

Question 4

What's the difference between public liability and professional indemnity insurance?

Accepted Answer

Public Liability Insurance covers physical injury or property damage caused by your business operations. For example, a customer injured on your premises or damage to a client's building during your work.

Professional Indemnity Insurance covers financial loss caused by professional advice, services, or errors. For example, an accountant giving incorrect tax advice that costs a client money, or a consultant's recommendation that leads to business losses.

Many New Zealand businesses need both types of coverage. Public liability protects against physical risks, while professional indemnity protects against advice and service-related claims.

Question 5

How much public liability cover do I need?

Accepted Answer

The appropriate coverage amount depends on your business circumstances:

$1-2 million: Suitable for low-risk office businesses with minimal public interaction
$5 million: Common for retail, hospitality, and service businesses
$10 million+: Recommended for construction, trades, and high-risk industries

Consider these factors when determining coverage:

Your industry's typical claim sizes
Client or contract requirements (many specify minimum coverage)
Value of assets you could potentially damage
Potential severity of injuries in your business environment

Gerrards Insurance can assess your specific risk profile and recommend appropriate coverage levels.

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