Running a business without Public liability insurance can expose you to serious financial, legal, and operational risks. While public liability insurance is not always legally mandatory in Australia, operating without it can leave your business vulnerable if a third party is injured or their property is damaged as a result of your business activities.

For many Australian businesses, the consequences of not having public liability insurance can be severe.

You Could Be Personally Liable for Claims

If your business causes injury to a customer, client, or member of the public, you may be held legally responsible for compensation and legal costs. Without Public liability insurance, your business must pay these costs out of pocket.

This can include:

• Medical expenses
• Legal defence costs
• Court settlements or compensation payouts
• Repair or replacement of damaged property

For sole traders and small businesses, these costs can quickly become financially devastating.

Learn more about Public Liability Insurance and how it protects your business.

Legal Costs Can Add Up Quickly

Even if you believe your business is not at fault, defending a claim can still be expensive. Legal fees alone can run into tens of thousands of dollars before a matter is resolved.

Without public liability insurance, you are responsible for:

• Hiring legal representation
• Court and investigation costs
• Settlement negotiations

Insurance not only helps cover compensation, but also provides access to legal support when claims arise.

Your Business Could Lose Contracts or Leases

Many landlords, councils, suppliers, and clients require businesses to hold Public liability insurance before they will:

• Sign a commercial lease
• Award contracts
• Allow access to worksites
• Approve event participation

Without insurance, your business may miss out on work opportunities or be unable to operate in certain locations.

This is particularly common for:

• Construction and trade businesses
• Hospitality and retail venues
• Event-based businesses
• Contractors and consultants

Your Personal Assets May Be at Risk

If your business structure does not offer full protection (such as a sole trader or partnership), you could be personally liable for claims. This means personal assets such as savings, vehicles, or property may be at risk if a claim exceeds your business’s ability to pay.

Having the right business insurance in place can help separate business risks from your personal finances.

Explore tailored Business Insurance solutions.

Claims Can Disrupt or Close Your Business

A single uninsured incident can significantly disrupt operations. In some cases, businesses are forced to close after a major claim due to the financial strain.

Public liability insurance helps protect against:

• Unexpected claims
• Business disruption
• Reputational damage
• Loss of income due to legal action

For many businesses, insurance is not just protection, it’s essential for long-term survival.

Is Public Liability Insurance Mandatory in Australia?

Public liability insurance is not legally mandatory in all situations. However, it is often required by:

• Local councils
• Landlords
• Industry regulators
• Clients or principal contractors

In practice, many businesses cannot operate without it.

Read more about what business insurance is mandatory in Australia on our site.

How an Insurance Broker Can Help

An experienced insurance broker can help you determine whether public liability insurance is required for your business and arrange suitable cover based on your risks and activities.

A broker can:

• Assess your business operations and risk exposure
• Recommend appropriate levels of public liability cover
• Compare policies from multiple insurers
• Explain exclusions and policy conditions
• Assist with claims if an incident occurs

Working with a broker helps ensure you are protected without paying for unnecessary cover.

Speak with a Brisbane business insurance broker for tailored advice.

Final Thoughts

Operating without public liability insurance exposes your business to significant financial and legal risk. Even a minor incident can result in costly claims, lost contracts, or long-term damage to your business.

If you’re unsure whether your business needs public liability insurance, seeking advice early can help prevent serious problems later.

Contact Morgan Insurance Brokers to discuss your business risks and arrange suitable public liability insurance cover.