When it comes to calculating the cost of a Public Liability insurance* for retailers, there isn’t a one size fits all price. There are a variety of factors that need to be taken into consideration such as the size of the business, the number of employees, location and industry. 

No two retail businesses are the same, each with their own particular exposure to risks, making their insurance needs unique. To get a better understanding of how Public Liability insurance is calculated let’s take a closer look at the various factors in greater detail.  

 How much Public Liability insurance cover does my retail business need? 

There are a variety of different kinds of retail businesses within New Zealand, from the traditional storefront retailers to online stores. With such a range in the types of retail businesses, the type of cover required will also rely on a range of factors. 

One of the common impacting factors is contractual requirements. These would apply if you were a retail business operating within a shopping centre or a rental space for example. A minimum level of Public Liability insurance is often required and will be outlined within the rental/lease agreement. 

Different insurers will offer a varying range of cover options such as $5 million, $10 million and $20 million. Keep in mind the level of cover you may need can be dependent on the type of retail business you operate and the likelihood of personal injury (when not covered by the ACC) or damage to a third party’s property caused by your business operations.  

What factors affect the pricing of Public Liability insurance? 

Type of business 

The retail industry is so diverse and so are the individual insurance needs of each business. There are different levels of risk, with the higher chance of a business causing a Public Liability claim to occur, the higher the premium and vice versa.  

The process for assessing risks, is also different for each insurance company. One insurer may consider a particular business risk as high, while another may not consider it as risky. The reason for this is determined by the number of claims each insurance company has received for that type of business.  

 Number of staff 

The amount of employees you have working for your retail business can also have a significant impact on how the cost of your policy is calculated. As a general rule of thumb, the more staff your business has, the higher the cost of the premium. With more people involved with your business there is an increased potential risk for an employee to accidentally cause injury or property damage to a customer, member of the public, or third-party. 

Why do retailers need to consider Public Liability insurance? 

Big or small, no matter what kind of retail business you run, you rely on your customers and suppliers to keep your business going. This means you also have a duty of care as a business owner to take reasonable steps to make your retail space  safe and that you have taken the reasonable steps to protect customers (and others) from harm or damage while interacting with your business.  

One of the risks a retail business may face include slips, trips and falls which can result in injury (when not covered by the ACC). Another risk is providing a faulty product/s that may cause injury or damage to a third party’s property (typically covered by the Product Liability section of the Public Liability policy). 

 What is typically covered? 

  • Compensation for accidental damage to third party property 
  • Compensation for personal injury or death to third parties where the ACC does not provide cover 
  • Legal and defence costs 

What is typically NOT covered? 

  • Injury to your employees 
  • Damage to your own property 
  • Compensation for personal injury whereby cover is provided by the ACC 
  • Known claims and circumstances 

Product Liability Insurance 

Product Liability insurance typically forms part of a Public Liability insurance policy and can be an important form of cover when running a retail business. Product liability cover protects you and your business if your goods cause injury or damage to third parties.  

The term ‘product’ is typically defined in your insurance policy wording so it is important to check the definition in each individual policy.  

‘Product’ generally means anything that has been manufactured, constructed, erected, assembled, installed, grown, extracted, produced or processed, treated, altered, modified, repaired, serviced, bottled, labelled, handled, sold, supplied, re-supplied or distributed, imported or exported by you, or on behalf of your business.   

In the event you were to negligently supply a product that caused a claim against your business for injury (not covered by the ACC) or property damage, Product Liability insurance will cover* the damages awarded to the third party and the costs of investigating and defending the claim made against you.  

Get your Public Liability insurance sorted 

Running a retail business involves wearing many hats, with many things going on at once that to-do list never seems to stop growing! But thing that cannot wait is getting your Public Liability insurance sorted.  

We know that you have a lot going on, so leave the shopping around for your Public Liability insurance with us. At Public Liability Insurance it’s as easy as jumping online or giving us a quick call to get your policy in order. Compare quotes from some of New Zealand’s leading insurers, select your policy and receive your documents straight to your inbox. 

No paperwork, no fuss, just peace of mind insurance in minutes! 

*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice. 

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