Insurance for Business Incurred Injuries: Public Liability vs Workers Compensation

Accidents at business premises can happen despite precautions. For businesses it's critical to consider what insurance protections may cover expenses arising from workplace visitors or employees sustaining injuries. Not having the right insurance cover may leave businesses liable for damages claims and legal costs. Here's some guidance on how you may (or may not) be covered, and some details on the types of insurance cover available through Gallagher.

Public liability relates to physical or psychological injuries to members of the public or visitors, and workers compensation relates to your own employees or in some instances contractors.

Any business where members of the public have access to the premises or site of work are advised to consider public liability insurance cover ‒ but this protection can also be misunderstood as public liability (PL) applies to people but excludes the business's employees.

In other words, if one of your staff is injured at work the business's public liability insurance won't cover that ‒ but instead they would typically be covered by workers compensation (which is compulsory for employers to have in place).

What business risks does public liability insurance cover?

Public liability insurance is typically for businesses that come into contact with members of the public or customers, produce consumer goods or if there is potential for your business to cause damage to a customer's property. It's designed to cover legal and settlement costs if a visitor to your business premises or place of work, or their possessions, are harmed as a result of your business, and they bring a legal claim against you.

For example, if a visitor to your business office trips and falls over something on the floor, breaking a laptop they were holding and injuring their leg, they may sue your business if they believe the cause was business related, such as not removing trip hazards in a public space.

What would public liability insurance not cover?

As with all insurance policies, it is important to understand that not everything is covered everywhere, all the time. Here are some example of risks that are not covered by a standard public and products liability policy unless specially agreed with the insurer:

• asbestos liability
• cyber liability
• environmental liability
• faulty or incomplete work
• professional liability
• product recalls (unless it is specifically part of an agreed policy).

What does workers compensation insurance cover?

Workers compensation is compulsory insurance cover that is a regulatory requirement for all Australian businesses to protect their employees. It applies only to employees (including volunteers, and contractors and subcontractors in some circumstances) and provides cover if they are injured in the course of working for your business or if they become ill as a result of their work. It doesn't apply to damage to their property or possessions unless these are damaged when an injury occurs.

In Australia workers compensation insurance providers vary but the intention is the same: to provide an affected employee with workers compensation entitlements such as:

• financial support while they're certified unable to work
• eligible medical and hospital expenses
• eligible rehabilitation services
• lump sum payments for cases of permanent disability

across the states and territories, and each scheme has different rules in place.

How does my business access the right workers compensation for employees?

Workers compensation is compulsory for businesses with employees in any capacity. The workers compensation a business needs to purchase depends on its location ‒ each state and territory regulates the workers compensation for business operations within their borders. In New South Wales, Queensland, Victoria and South Australia industry rates are set by the regulator and can't be negotiated. Businesses in Canberra, Tasmania, Western Australia or the Northern Territory have the flexibility to negotiate their premium rate each year and Gallagher brokers can support our clients access the best price available for workers compensation in these jurisdictions.

Get expert help with your business insurance needs

Our business insurance specialists can help with public (and products) liability cover for your business and advise on any other business insurance requirements.

For workers compensation Gallagher not only offers access to insurers for businesses in locations that have a choice of workers compensation insurers, but can also help with the management of workplace injuries when they occur. Our Workplace Risk team also offer everything from safety mentoring and training through to health and wellness programs, hazard and risk profiling, and incident management and investigation for larger companies.

Updated 18 June 2024

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