Three ways a small business buys cover

Most small businesses in Australia buy their insurance through one of three channels.

• A local broker office. A small team you can visit, mostly working for businesses in its own area. Many local offices act as authorised representatives under a larger firm’s Australian financial services licence.
• A national brokerage. A large firm with offices in several states, often with specialist teams for particular trades or for large property and liability programs.
• An online platform or quote site. You answer questions on a website, see prices from one or more insurers side by side, then buy and pay online. Some platforms are brokers in their own right, some are authorised representatives, and some sell for a single insurer.

The line between the first two is thinner than it looks. A local office may sit inside a national licence, and a branch of a national firm may run much like a local office. What changes from one to the next is who you deal with, how closely they look at your business, and what they do when something goes wrong.

General advice or personal advice?

Ask this first, because it decides who carries the job of matching the policy to your business. Moneysmart describes general advice as a recommendation or opinion about a financial product that is not tailored to your personal circumstances. A provider giving it must warn you that it does not take account of your objectives, financial situation or needs, and should prompt you to consider whether the product suits you before you act. Personal advice, in Moneysmart’s words, is tailored to your personal circumstances.

On an online platform the general advice warning usually sits on the quote page or in the documents. It tells you the platform is giving you prices and product information, and the decision about what the business needs stays with you. A broker who takes your details and recommends cover for your business is generally giving personal advice. Know which one you are getting, because with general advice nobody else has checked that the policy fits.

Who reads your lease, contracts and the policy wording?

Many small business policies are bought because a lease, a head contractor or a client contract demands them. Those documents set liability limits, ask for the landlord or principal to be noted on the policy, and sometimes require cover that a standard wording does not give. A quote form asks for your turnover and occupation. It does not read the insurance clause in your lease.

A local office and a national brokerage can both check those documents against the wording. Ask who will actually do it, and whether you will deal with the same person at renewal. On an online platform that check is yours to make. If the contract is short and asks for a common public liability limit, it may take you ten minutes. If the contract is long, or you are unsure what an exclusion means for your trade, hand it to someone whose job it is.

When there is a claim, and when there is a complaint

On a claim, the insurer decides. What changes between channels is who sits beside you. A broker who arranged the cover commonly lodges the claim, deals with the insurer’s assessor and chases delays. Online platforms differ: some help with claims, others pass you straight to the insurer’s claims team. Find out before you buy, not after the fire.

For a complaint, start with the firm you dealt with. The Australian Financial Complaints Authority (AFCA) says on its small business page to contact your financial firm first, and that its own service is free. It treats an organisation with fewer than 100 employees as a small business. The same page says AFCA cannot consider cover for public liability, products liability, professional indemnity or industrial special risks under a small business insurance product. On those covers the outside route is narrower, so getting the wording right at the start counts for more.

How each is paid, and how to check the licence

Brokers and online platforms are commonly paid by commission from the insurer, a fee from you, or both. Our article on insurance broker vs buying direct covers how that works and what to ask for in writing, so we will not repeat it here.

Checking the licence takes a few minutes. ASIC describes its Authorised Representative Register as a public record of the representatives authorised to provide financial services on behalf of a licensee. It shows each representative’s status, the licensee it is associated with, and whether it can sub-authorise others, and you search it through ASIC’s Professional Registers. Look up the firm named on your quote, whether it is a local office, a national brokerage or a platform, and see who stands behind it.

Which one suits which business

An online platform suits a simple, common risk: a sole trader who needs a standard public liability limit for a site induction and knows what the certificate must show. A local broker office suits an owner who wants to sit down with the same person each year, bring the lease and contracts, and have one contact when a claim comes in. A national brokerage suits a business trading in several states, or a risk that needs a specialist team, such as a large property schedule or a hard to place trade.

What FRS does: FRS is a local broker office in Box Hill and Hawthorn. We act as an authorised representative under a national licensee’s Australian financial services licence, and the licence details are at the foot of every page on this site. We take your business details, read the lease and contracts you send us, arrange cover on your instructions and help with the claim if one comes. Our team also speaks Mandarin; see our Chinese speaking insurance broker page.

To see how we set up a business program, start with our business insurance broker page.

Frequently asked questions

Is an online insurance platform the same as a broker?

Sometimes. An online platform or quote site may hold its own licence, act as an authorised representative of a licensee, or sell for a single insurer. Its documents and ASIC’s Professional Registers show who stands behind it. What matters more is whether it gives personal advice on your business or general advice built from the answers you enter on the form.

Is a local broker office part of a bigger network?

Often. Many local broker offices act as authorised representatives under a larger firm’s Australian financial services licence. ASIC’s Authorised Representative Register shows each representative’s status and the licensee it is associated with. FRS works this way, and the licence details are printed at the foot of every page on this site.

Can I complain to AFCA about a broker or online platform?

Yes, if the firm is an AFCA member, after you have raised it with the firm first. AFCA says its service is free and treats an organisation with fewer than 100 employees as a small business. Its small business page also lists covers it cannot consider under a small business insurance product, including public liability and professional indemnity.

What should I ask before buying business insurance online?

Ask whether the advice is general or personal, what happens to the insurance requirements in your lease or contracts, who handles a claim, how the firm is paid and where a complaint goes. If the answers fit a simple risk you understand, buying online can be enough. On the insurance broker vs online question, the answers decide it, not the logo.

The post Local broker, national brokerage or online: which one fits? appeared first on Fortis Risk Solutions (FRS).

One breakdown, three separate losses

When a cool room compressor fails on a Saturday night, a food business usually loses three things at once: the stock, the repair bill and the trade while the kitchen or shop runs short. Each sits in a different part of a business policy. business.gov.au lists them separately:

• Deterioration of stock covers lost stock in cold storage after a fridge or freezer breaks down.
• Machinery breakdown covers repair or replacement of broken-down machinery, such as the compressor or the fan motor.
• Business interruption pays your ongoing business costs if an insured event interrupts your business.

Holding one does not give you the others. A policy with machinery breakdown and no deterioration section pays the technician and nothing for the meat in the bin. Packages for cafes and bakeries commonly treat both as optional, so read the schedule, not the brochure.

A fridge breakdown and a power outage are different claims

Food spoilage insurance wordings name the causes they respond to. The usual list is breakdown of the refrigeration plant, a change in temperature after accidental damage, and failure of the electricity supply. The first is the most straightforward claim. The last is where most arguments start.

Many wordings pay for a failure of the public supply only if the section says so in terms. Some exclude a cut the supply authority makes on purpose, such as planned maintenance or load shedding on a hot afternoon. Some apply a time excess, meaning the power has to be off for a minimum number of hours before the section pays anything.

On your schedule, look for the causes listed, any time excess and the limit for this section, which is often lower than the sum insured on your stock. A grocer with a walk-in cool room of dairy and meat, like the stores on our grocery store insurance page, has more riding on that limit than a cafe with one under-bench fridge.

Can you claim from the electricity distributor instead?

Sometimes, for a narrower set of events. The Essential Services Commission, Victoria’s energy regulator, says customers can lodge a compensation claim with their distributor for damaged property or food spoilage caused by an unauthorised voltage variation, for example a power surge. The distributor may ask for proof such as technical reports, photos or receipts. If you are unhappy with how the claim is handled, the commission points to the Energy and Water Ombudsman Victoria.

Do not confuse that claim with the reliability payments the commission calls GSL payments. It says those range from $40 to $380 and go to customers whose supply falls below set reliability thresholds, usually as an automatic bill credit. It also says they may not be payable where an unplanned outage was caused by events outside the distributor’s control. A credit of that size will not replace a cool room of stock. Your own policy is the main source of money here, and the distributor is at most a second one.

The four-hour rule and what you throw out

An insurer pays for stock that spoiled. It is much harder to claim for stock thrown out with no record of why. The Victorian Department of Health’s factsheet on food safety after a power failure says food still cold to touch, below 5°C, is safe to use. Once cold or frozen food is no longer cold to touch, it can be kept for up to four hours and then must be thrown away, or cooked and eaten if it is raw meat. Frozen food that is still solid when the power returns is safe to refreeze.

The factsheet is written for the community, and your council or your own food safety records may hold you to a stricter standard. For the claim, what counts is that each decision to discard follows a rule you can show. Record the temperature when you find the problem and again before anything goes in the bin.

What to keep for the claim

1. Temperature logs. The records you already keep for food safety, plus readings taken during the event.
2. Photos. The stock before it is discarded, with the unit and its temperature display in the frame.
3. A stock list. What was lost, the quantities, and supplier invoices showing what you paid.
4. The technician’s report. It names the cause, which tells the insurer whether this was a breakdown, wear and tear or a supply problem.
5. Outage details. The date and duration, and any confirmation the distributor gives you.

Call before you throw out a large load if you can. Some insurers want to see the stock first, and policies usually expect you to limit further loss, for example by moving food to a unit that still works.

Setting it up before the next long weekend

Most spoilage disputes are about limits, not whether the section exists. Set the deterioration limit on your highest stock level, such as the week before Christmas, not the average week. Ask whether an ageing compressor would be refused as wear and tear, since machinery breakdown sections commonly exclude gradual deterioration. If a week without the cool room would cost more in lost sales than in stock, check that your business interruption insurance extends to machinery breakdown and to failure of the power supply. A standard interruption section often responds only to physical damage such as fire or storm.

What FRS does: we read the deterioration, machinery breakdown and interruption sections side by side against your premises and equipment list, set the limits on your real stock levels, and ask insurers how each wording treats an outage on the supply network. After a loss, we help you lodge the claim with the logs, photos and invoices the insurer will ask for.

For the sections a dining venue usually carries, see our restaurant insurance page.

Frequently asked questions

Does business insurance cover food spoiled in a power outage?

Only if the policy has a deterioration of stock section that names failure of the electricity supply as a cause. Many business packages leave that section out unless you add it, and some wordings exclude deliberate cuts by the supply authority or require the power to be off for a minimum number of hours. Check the causes, time excess and limit on your schedule.

Is a commercial fridge repair covered by business insurance?

Only under machinery breakdown cover, which business.gov.au describes as paying for repair or replacement of broken-down machinery. It is a separate section from deterioration of stock, so you can hold one without the other. Wear and tear and gradual deterioration are common exclusions, so a breakdown put down to the age of the compressor may not be paid.

Can I claim spoiled food from my electricity distributor in Victoria?

Sometimes. The Essential Services Commission says customers can lodge a compensation claim with their distributor for damaged property or food spoilage caused by an unauthorised voltage variation, such as a power surge, with proof like photos, receipts or technical reports. If you are unhappy with how it is handled, the commission points to the Energy and Water Ombudsman Victoria.

Should I throw out spoiled stock before the insurer sees it?

Not if you can avoid it. Photograph the stock, record the temperatures and call your broker or insurer first, because some insurers want to inspect a large loss. Where food safety forces a quick decision, the Victorian Department of Health says food no longer cold to touch can be kept for up to four hours and then must be thrown away.

The post Fridge breakdown or power outage: is spoiled stock covered? appeared first on Fortis Risk Solutions (FRS).

Who makes the claim on the building policy

In Victoria the owners corporation insures the building, not each owner. Consumer Affairs Victoria says every owners corporation except a two-lot subdivision must hold reinstatement and replacement insurance for the buildings on common property, plus public liability cover of at least $20 million for the common property. Because the policy belongs to the owners corporation, the claim is lodged in its name, which in most blocks means the strata manager does the paperwork.

That surprises owners whose ceiling is dripping. You cannot ring the strata insurer yourself and expect it to act. Report the leak to the manager in writing, attach photos and the date you first saw it, and ask for the claim number once it is lodged. If the water is still running, tell the manager what you shut off and when. Those details end up in the assessor’s file.

Where the leak started decides the rest

Every water claim in a block turns on two questions: where did the water come from, and what made it escape? A cracked riser pipe in a shared wall is a common property problem. A washing machine hose that split inside one apartment is a lot problem, even though the damage shows up in the unit below.

The plan of subdivision and the owners corporation rules draw the line between lot and common property. Some plans put the boundary at the inside face of the walls and others elsewhere, so it is not the same in every building, which is why the manager will often send a plumber to find the source before anyone works out who pays the strata excess.

The cause matters as much as the location. Strata policies commonly exclude gradual deterioration, water entry through failed waterproofing and defective building work. A shower membrane that has leaked slowly for two years may not be a claim at all, and then the question is who pays for the repair, not who pays the excess.

When the owners corporation can pass the excess to one owner

So who pays the strata excess? Consumer Affairs Victoria lists three situations in which an owners corporation may separately levy a lot owner rather than spread a cost across all levies:

• Fault. The excess, or an increased premium, resulting from a claim caused by a culpable or wilful act or the negligence of a lot owner, a tenant or their guest.
• Uninsured damage to common property. Damage a lot owner or tenant causes to common property that the policy does not cover, or that costs less than the excess to fix.
• A claim that affects only one lot. The excess on a claim that relates solely to that owner’s lot, whether or not anyone was careless.

The third point catches people out. If the only damage is inside your apartment and the claim is made on the building policy, the owners corporation can ask you for the excess even though you did nothing wrong. When the leak damages common property or more than one lot and no single owner caused it, the cost usually stays with the owners corporation.

Strata excesses are set for the whole building, and many policies carry a separate, higher excess for water damage than the standard excess on the schedule. Ask the manager for the current excess before the next leak rather than after it.

What your own policy can pick up

Consumer Affairs Victoria notes that lot owners can take out their own insurance for damage to their lot or their interest in the common property, separate from the owners corporation policy. For most owner occupiers that is a home and contents policy written for an apartment.

It does three jobs when water gets in. It pays for your furniture, electronics and other belongings, which the building policy does not touch. It can pay for fit-out you added, such as a renovated kitchen or new flooring, where the strata policy covers the building only as originally built. And some contents policies include cover for the strata excess when a levy lands on you, usually up to a stated limit. Read that section before you rely on it, because not every policy has it.

If the leak came from the apartment above, your contents claim does not have to wait for the owners corporation to settle who was at fault. Your insurer can pay under your policy and then pursue whoever caused the loss.

If you think the charge is wrong

Ask the manager in writing which ground the levy relies on and for a copy of the plumber’s report. Many disputes end there, because the report shows the pipe was common property after all.

If it does not, Consumer Affairs Victoria describes a three-step path. First, every owners corporation must run an internal complaints process, and a lot owner can complain in writing on the approved complaint form. If the owners corporation decides to take no action, it must give written reasons. Second, a lot owner can seek help from the Dispute Settlement Centre of Victoria, which can only assist if all parties agree to take part. Third, the matter can go to VCAT. Consumer Affairs Victoria also notes that VCAT can order a lot owner to pay the owners corporation’s reasonable costs of recovering an unpaid amount, so ignoring a levy you dispute can make it more expensive.

None of this replaces legal advice on your plan and your facts. It does tell you which questions to ask first.

What FRS does

For committees, we check the excess structure and how water damage between lots is handled before the policy is placed, and compare the building sum insured with a current valuation. When a burst pipe comes in, we help the manager lodge the claim and follow it through with the insurer. For owners, we read the strata schedule before quoting a contents policy, so you are not paying for building cover twice and you know whether the strata excess is covered. If you are lodging a claim now, our claims page lists what to send.

For the cover sections and usual exclusions on the building policy, see our strata insurance page.

Frequently asked questions

Can the owners corporation make me pay the strata excess?

Yes, in some cases. Consumer Affairs Victoria says an owners corporation may separately levy a lot owner for the excess when the claim relates solely to that owner’s lot, or when the claim was caused by the negligence or wilful act of the owner, their tenant or a guest. Otherwise the excess is usually shared through levies.

Who lodges a strata insurance claim for a water leak?

The owners corporation, because the building policy is in its name. In most blocks the strata manager lodges the claim with the insurer. Report the leak to the manager in writing with photos and the date you first noticed it, and ask for the claim number so you can follow progress.

Does my contents insurance cover the strata excess?

Some policies do. Certain home and contents policies written for apartments include cover for an owners corporation excess levied on you, usually up to a stated limit, while others leave it out. Check the policy wording or ask your broker before a leak, because the excess on a strata water claim can be significant.

What can I do if I disagree with an excess levy?

Ask the manager in writing which ground the levy relies on and for the plumber’s report. If that does not settle it, use the owners corporation’s internal complaints process, then the Dispute Settlement Centre of Victoria if all parties agree, and finally VCAT. Consumer Affairs Victoria sets out these steps on its website.

The post Water leak in an apartment: who pays the strata excess? appeared first on Fortis Risk Solutions (FRS).

What WorkSafe Victoria says about WorkCover for sole traders

WorkCover is an employer’s insurance. It pays workers injured at work, and the premium is set on the wages a business pays. A sole trader has no employer. WorkSafe Victoria’s guidance on who must register says a sole trader, an individual in a partnership or an individual trustee of a trust does not need to register if they employ no other people as workers.

business.gov.au, the federal government’s business site, states the result plainly: if you are a sole trader, workers compensation insurance does not cover you. Hiring staff changes your obligations but not your own position. Registering because you employ an apprentice covers the apprentice. It does not turn the owner into a worker.

That is the short answer on WorkCover for sole traders, and it is not unique to Victoria, though each scheme has its own rules. business.gov.au lists a workers compensation regulator for every state and territory. If you take work interstate, check that state’s rules rather than assume Victoria’s apply.

When a sole trader can still count as someone else’s worker

There is an exception that matters for trades and contractors. WorkSafe Victoria’s guidance on who is and is not a worker says a business’s workers can include a contractor or subcontractor, including one who operates as a sole trader, a partner or a company director. Two questions decide it:

• Does the business that hired you have the legal right to control not only the result of the work, but also what work is done and how?
• Does your business depend on that business for its existence?

If the answer to both is no, WorkSafe says you are not that business’s worker. If either answer is yes, you may be, and its WorkCover policy could respond to your injury. A plasterer who works for one builder, on the builder’s hours and to the builder’s instructions, sits in a different place from a plasterer who quotes for a dozen clients a year.

Do not plan around this. The test looks at the whole working arrangement, it is often argued after the injury rather than before, and a sole trader who quotes for several clients will rarely meet it. A weekly payment you might be entitled to, after a dispute, is not a plan for the mortgage.

Partners, trusts and company directors

Partners and individual trustees sit with sole traders under WorkSafe’s registration guidance: no workers, no need to register.

A company is different. WorkSafe says that if your company employs you personally, you are a worker of your own company and the company needs to register. A director who is only an office holder, appointed without an employment contract, is treated differently from a director employed under a service contract, and WorkSafe tells directors who are unsure which they are to get their own legal advice. WorkSafe also exempts a business that has no apprentices and pays no more than $7,500 in remuneration in a financial year, so a small company paying its owner very little may still sit outside the scheme.

Changing from sole trader to company can change your position. That is a structural decision for your accountant, not a way to buy injury cover.

What fills the gap: accident and sickness cover

business.gov.au points sole traders to accident and sickness insurance from a private insurer, which pays for loss of income while you recover. It is a general insurance product. It typically pays a weekly benefit while injury or illness stops you working, plus lump sums for defined permanent injuries. Many policies respond to injuries at work and away from it, which suits a sole trader whose income stops wherever the accident happened.

It is a different product from income protection, which business.gov.au lists separately and which is usually sold inside a life insurance product with a monthly benefit. Accident and sickness cover is written more quickly and often sits beside a business insurance pack, but it usually runs for a shorter benefit period. If a long illness worries you more than a broken wrist, compare the two before you choose.

It also pays income, not treatment. Medical and rehabilitation costs are covered only where the policy includes that optional section.

Setting it up so it pays when you need it

1. Weekly benefit. Underwriters compare the benefit you ask for with what you actually earn. Pick a figure your tax returns and records support, because those records are what the insurer reads at claim time.
2. Waiting period. This is the stretch at the start of each claim before benefits begin. A longer one lowers the premium. Count the savings and booked work that would carry you through the first weeks before you pick it.
3. Benefit period. This is how long benefits run once they start, from a set number of weeks to several years. A sprained ankle and a back injury are different problems.
4. Occupation. Policies are rated on whether your work is manual, mixed or office based. The occupation on the schedule should match the work you do on site, not the title on your business card.
5. Existing conditions. Pre-existing conditions are a usual exclusion. Declare old injuries when you apply.

Head contractors sometimes ask subcontractors to show they hold accident and sickness cover before starting on site, alongside a certificate for public liability insurance. The two are often confused. Public liability pays for injury or damage you cause to other people. It pays nothing when you are the one hurt.

What FRS does: we compare how insurers define your occupation, the waiting and benefit periods on offer and the exclusions, and set the weekly benefit against your actual earnings. If you already hold cover through your super, we check the two so they do not pay for the same week. When you are hurt, we lodge the claim, submit the income evidence and handle the insurer’s questions.

For cover details and the usual exclusions, see our personal sickness and accident insurance page.

Frequently asked questions

Can a sole trader get WorkCover for their own injuries?

Not in Victoria. WorkCover is taken out by a business to cover its workers, and WorkSafe Victoria says a sole trader with no workers does not need to register. Registering because you employ staff covers those staff, not you. A private accident and sickness policy is the usual way to replace your own income after an injury.

Does a head contractor's WorkCover cover me as a subcontractor?

Possibly. WorkSafe Victoria says a business’s workers can include contractors, and asks two questions: whether the business controls what work is done and how, and whether your business depends on it to exist. If both answers are no, you are not its worker. The test looks at the whole arrangement, so do not rely on it without checking.

Is accident and sickness insurance the same as income protection?

No. Accident and sickness cover is a general insurance product that pays a weekly benefit while injury or illness stops you working, usually for a shorter benefit period. Income protection is usually sold inside a life insurance product and pays a monthly benefit. Compare the waiting period, benefit period and occupation definition before choosing between them.

Do company directors get WorkCover in Victoria?

It depends on the arrangement. WorkSafe Victoria says that if your company employs you personally, you are a worker of your own company and it must register. A director who is only an office holder, without an employment contract, is treated differently. WorkSafe suggests directors who are unsure which applies get their own legal advice.

The post Does WorkCover cover sole traders if they get injured? appeared first on Fortis Risk Solutions (FRS).

What a claims management company does

A claims management company works for the policyholder, not the insurer, and is paid out of the claim. According to the Insurance Council of Australia, these firms may handle the paperwork, liaise and negotiate with your insurer, and coordinate repairs, under a contract that charges an upfront fee, a percentage of the insurance payout, or both. Some people use one because they cannot face dealing with the insurer after a loss, or need support to do it.

The industry is under watch. In its supervisory priorities for 2026-27, published on 30 September 2026, ASIC said it will review the practices of for-profit claims management firms, including those commonly referred to as disaster chasers, and the potential implications of some of those practices for consumers. Storm season has started in Victoria, and that is when the knock on the door usually comes.

Where the fee comes from

The ICA is blunt on this point: claims management companies do not offer a free service, and their fees are not covered by your insurance policy. The money comes out of what the insurer pays you.

That matters most on a building claim. If your contract takes a share of a cash settlement, the amount left may not cover the repairs the settlement was calculated to pay for. The ICA warns that where you cannot pay the fee another way, the contract may require you to accept a cash settlement rather than have the insurer manage the repairs, so the fee can be taken from it. Once that happens, the cost of getting the builder back on site sits with you.

There is also an information cost. A firm acting under your authority deals with the insurer directly and may make decisions on your behalf, and the ICA notes that you may not receive important information about your own claim along the way.

How disaster chasers work

A disaster chaser is a different problem, though the two can overlap. The ICA’s fact sheet describes operators who knock on doors after a storm, say they have found damage to your property, offer quick repairs or help with the claim, and sometimes say they represent an insurance company. The ICA adds that they are often unlicensed and their work is often non-compliant.

In its November 2025 warning, the ICA said some of these operators pressure owners to sign a contract on the spot for future repair work. Its advice is to speak to your insurer before agreeing to any repairs or rebuilding, because insurers only pay for approved work that is covered by the policy. If you have already signed, the ICA says you have a statutory 10-day cooling-off period, and your insurer can help you end the arrangement.

For a business, the same rules apply to a storm-damaged shopfront or warehouse roof. An unapproved repair can leave a gap between the invoice and what the business pack pays, at the point when cash is shortest.

Questions to ask before you sign anything

If you still want paid help, the ICA suggests getting answers in writing to these questions first:

• What will the service cost, and is it a flat fee or a percentage of the payout?
• How is the fee paid if the insurer repairs the property instead of paying cash?
• What do you pay if the claim fails or pays less than expected, and what if you stop before it settles?
• Will they give you a written scope of work, and must you sign before you see it?
• Will they lodge an AFCA complaint or start court action without your permission, and will they charge you for using AFCA?
• Do they hold an Australian Financial Services Licence that covers claims handling and settling, and are they an AFCA member?

A firm that will not answer these on paper has answered them anyway.

What you get without paying a fee

Lodging directly costs nothing extra. The ICA points out that insurers employ specialist claims managers, explain the policy and the claims process, and can recommend approved repairers. Insurers that subscribe to the General Insurance Code of Practice also work to set timeframes for keeping you informed and deciding the claim.

If you disagree with the outcome, the dispute path is free as well. You complain to the insurer first, and if that does not resolve it, AFCA is free for consumers and small businesses. A claims management company cannot open a door that is closed to you; it can only walk you through one you already have, for a price.

In an apartment or townhouse, check who should be claiming before anyone signs. Damage to the building and common property usually falls under the owners corporation’s strata policy, while your own home and contents policy covers what is inside your lot. A firm offering to run the building claim may be talking to the wrong policyholder.

What FRS does

Claims are part of the broker role, not an extra service sold after the loss. For clients whose cover we arrange, we lodge the claim, deal with the insurer’s claims team and assessor, check the scope of works against the policy wording, and follow up when the Code’s timeframes pass. If someone approaches you after a storm offering to manage a claim on a policy we placed, call us before you sign, and we will tell you what the insurer has already received and what is still outstanding.

To report storm damage or ask about a claim already lodged, use our claims page.

Frequently asked questions

Do I need a claims management company to make an insurance claim?

No. You can lodge a claim directly with your insurer, or through your broker if you have one, and the insurer’s claims team handles it for no extra fee. The Insurance Council of Australia says claims management company fees are not covered by your policy, so using one reduces what you keep from the payout.

How do claims management companies charge for their service?

According to the Insurance Council of Australia, they charge an upfront fee, a percentage of the insurance payout, or both, under a written contract. The fee is not covered by your policy. Some contracts require you to accept a cash settlement so the fee can be taken from it, which can leave less money for the repairs.

Can I cancel a contract I signed with a disaster chaser?

The Insurance Council of Australia says contracts signed with disaster chasers come with a statutory 10-day cooling-off period. Contact your insurer as soon as you can, because it can help you end the arrangement. Do not let repair work start until the insurer has approved it, since insurers only pay for approved work that the policy covers.

Is ASIC doing anything about claims management firms?

Yes. In its supervisory priorities for 2026-27, published on 30 September 2026, ASIC said it will review the practices of for-profit claims management firms, including those commonly called disaster chasers, and the potential implications of those practices for consumers. Until then, check any firm’s licence and AFCA membership before you sign.

The post Should you sign with a claims management company after a storm? appeared first on Fortis Risk Solutions (FRS).

Get the decision and the evidence in writing

Knowing what to do if your insurance claim is denied starts with paperwork. Under the General Insurance Code of Practice, an insurer that subscribes to the Code and denies a claim, or does not pay it in full, must tell you in writing which parts of the claim it does not accept and why. It must also tell you that you can ask for the information about you it relied on, and for copies of any reports from assessors, investigators or other experts. If you ask, the Code gives the insurer 10 business days to hand them over, free of charge.

Ask for all of it. The assessor’s report is often where the real disagreement sits, for example a report that describes storm damage as wear and tear.

One limit on scope. The Code’s claims and complaints sections apply in full to retail policies, such as home and contents, motor and travel cover held by individuals or used by small businesses. Larger commercial policies sit outside most of those sections.

Test the reasons against the policy wording

A denial should point to something in the policy: an exclusion, a definition the loss falls outside, a condition you are said to have breached, or information the insurer says you did not disclose when the policy started. Find that clause in your product disclosure statement and schedule, and read it in full along with the definitions it relies on.

Then check two things. Does the clause actually say what the insurer says it says? Do the facts in the assessor’s report match what happened? An insurance claim denied on the strength of one sentence in a report can turn on a single wrong fact, such as the date the damage started or how the water got in.

Lodge an internal complaint first

The formal first step is a complaint to the insurer through its internal dispute resolution process. ASIC’s Regulatory Guide 271 sets the rules. You do not have to use the word complaint, or put it in writing, for it to count, but writing gives you a record and a date. Under RG 271, the insurer must respond to a standard complaint no later than 30 calendar days after receiving it, unless the complaint is particularly complex or held up by things outside its control and it sends you a delay notice before then that explains why and tells you about AFCA.

The Code says your complaint must be handled by someone other than the person whose decision you are complaining about, and that a complaint about a declined claim gets a written response. RG 271 adds that if the insurer rejects your complaint, the response must deal with the issues you raised, set out its findings on the material facts and refer to the information behind them, in enough detail for you to decide whether to go further.

Keep it short. Give the claim number, the clause the insurer relied on, why you say it does not apply, the evidence that supports you, and the outcome you want, whether that is payment, a fresh assessment or a review of a cash settlement.

Taking it to AFCA

The Australian Financial Complaints Authority resolves disputes between consumers or small businesses and its member firms, and its service is free to use. AFCA’s insurance guidance lists denial of a claim among the decisions it can consider. Under AFCA’s rules, a complaint that has not been through the insurer’s own process can be referred back to the insurer first.

Watch the time limits. AFCA says to come to it within two years of the insurer’s response to your internal complaint, or within six years of when you first became aware of the loss, whichever comes first. It may extend them in special circumstances.

AFCA usually tries negotiation or conciliation first. If it makes a determination and you accept it, the insurer must comply. If you do not accept it, you keep the right to go to court. In deciding, AFCA does what is fair in all the circumstances, taking into account the law, industry codes and good industry practice.

Business owners should check one exclusion early. AFCA treats a business with fewer than 100 employees as a small business, but its small business guidance says it cannot consider cover under contractors all risks, public liability, products liability, professional indemnity or industrial special risks in a small business insurance product. It can consider a complaint about how a broker followed instructions or arranged the policy. If your business insurance dispute falls in an excluded class, legal advice is usually the next step.

Documents to gather

• The policy schedule, the product disclosure statement and any supplementary statement that applied on the date of loss.
• The insurer’s written decision and the claim number.
• Every assessor, investigator, engineer or builder report the insurer relied on, requested under the Code.
• Photos and video of the damage with dates, plus quotes, invoices and receipts.
• Your own report from a tradesperson, builder or engineer where the cause is in dispute.
• A dated log of every call and email, with the name of each person you dealt with.

Lawyer, broker or neither?

AFCA does not require a lawyer, and policyholders run most complaints themselves. Legal advice makes more sense where AFCA cannot hear the dispute, where the amount at stake is above what AFCA can award, or where you have rejected an AFCA determination and are thinking about court.

What FRS does: as a general insurance broker, we lodge claims for our clients and read the wording against the insurer’s reasons when a claim is declined. We request the reports the Code entitles you to and prepare the internal complaint with the evidence in order. If it goes to AFCA, we help assemble the file. We cannot promise an outcome, and some disputes need a lawyer rather than a broker, but we will say so when yours does.

To report a loss or get help with a claim that has been declined, see our claims page.

Frequently asked questions

Can I appeal an insurance claim denied by my insurer?

Yes, in two steps. First lodge a complaint through the insurer’s internal dispute resolution process, which must answer a standard complaint within 30 calendar days under ASIC’s rules. If you are still unhappy, take it to AFCA. The service is free, and an AFCA determination binds the insurer if you accept it.

How long do I have to take a denied claim to AFCA?

Generally two years from the insurer’s response to your internal complaint, or six years from when you first became aware of the loss, whichever comes first. AFCA can extend these limits in special circumstances, but do not rely on that. Lodge the internal complaint soon after the denial, while the evidence is fresh.

Do I need a lawyer to dispute a denied insurance claim?

Usually not for AFCA, which consumers and small businesses can use directly at no cost. Legal advice is worth getting when AFCA cannot consider the dispute, such as a small business public liability claim, or when you have rejected an AFCA determination and are weighing up court action.

Can my insurer refuse to give me the assessor's report?

Only in limited cases. Under the General Insurance Code of Practice, a subscribing insurer must give you copies of assessor or expert reports it relied on within 10 business days of your request. It can refuse in some circumstances, such as where a law says it need not, and must then give you its reasons.

The post What to do if your insurance claim is denied appeared first on Fortis Risk Solutions (FRS).

Two questions that sort most site claims

Most incidents on a building site can be placed with two questions. What was damaged, and who owns it? Was anyone hurt?

Damage to the works under construction belongs with contract works, including materials delivered to site and waiting to be installed. Most Australians call this construction insurance, and insurers also use names such as construction works or contractors all risks. Injury to a person outside your business, or damage to property owned by a neighbour or a passer by, belongs with public liability. business.gov.au describes public liability as cover for when someone dies, gets injured or has their property damaged because of your negligence. The word negligence matters. A liability policy responds where you are legally responsible, not simply because something went wrong near your site.

A burst pipe on a renovation: one event, two policies

Take an illustration, not a real claim. A fitting fails overnight on a renovation. Water runs through the new plasterboard and the freshly laid timber floor, then through the party wall into the house next door.

• The new plasterboard, flooring and anything else that forms part of the contract sits with contract works. That policy pays to strip out and redo the damaged work, less the excess.
• The neighbour’s damaged carpet, furniture and wall linings sit with public liability. The neighbour, or their home insurer, will claim against whoever caused the escape of water, and the liability insurer looks at who was legally responsible. If the plumber was a subcontractor, their own liability policy may be the one that answers.
• The failed fitting is the weak point. Policies commonly exclude the cost of fixing faulty workmanship or materials while still paying for the damage that followed. Read that exclusion in both wordings.

Notify both insurers, or your broker, as soon as an incident like this happens. Telling only one insurer leaves the other half of the loss unreported, and policies expect prompt notice.

Where each policy stops

Public liability wordings commonly exclude damage to the work you are performing, and a contract works policy does not pay for anyone’s injury. Liability policies also exclude injury to your own workers, because that is a workers compensation matter. WorkSafe Victoria administers WorkCover, the scheme that deals with Victorian workers who are injured or killed at work.

Construction insurance packages and how to read the schedule

A lot of contract works insurance vs public liability confusion starts with the name on the policy. Many builders buy something labelled construction insurance and assume it holds everything. Some packages combine a material damage section for the works with a liability section. Others insure the works only. The schedule tells you which. Look for two separate entries: a sum insured for the contract works and a limit of indemnity for public liability.

The two numbers behave differently. The contract works sum insured should track the value of the job, including approved variations. The liability limit is the most the insurer pays for one occurrence, and the right figure depends on what the contract or the principal asks for. Building contracts commonly set a minimum liability limit and spell out which policies the builder must hold. Check that clause against the certificate of currency before you sign, not after the first incident.

Excesses differ too. A water damage claim on the works and a property damage claim from the neighbour can each carry their own excess, so one event may cost you two.

Owner builders and small renovations

An owner builder has no head contractor whose policies sit over the job. Consumer Affairs Victoria lists arranging insurance among an owner builder’s responsibilities. In practice that usually means contract works for the structure and public liability for the site, while each trade you engage brings its own liability cover for its own work.

Two other covers get mixed up with these. Domestic building insurance, which Consumer Affairs Victoria says protects you if the builder dies, disappears or becomes insolvent, does not pay for storm damage during the build. Your existing home policy may restrict cover once major building work starts, so speak to your home insurer before the job begins rather than after a loss.

What FRS does

We read the insurance clause in your contract first, then set the contract works sum insured and the liability limit to match it. Where one job needs both, we place them so the two sections meet without a gap, and we check that the certificate of currency shows what the principal asked for. When an incident touches both policies, we notify both insurers and keep the two claims moving together.

For the works side, see our contract works and construction insurance page. For limits and certificates on the liability side, see our public liability insurance page.

Frequently asked questions

Does public liability cover damage to the building I am working on?

Usually not. Public liability wordings commonly exclude damage to the work you are performing, so a fire that destroys a half built frame is a contract works claim. Public liability answers for injury to other people and damage to their property where you are legally liable. That is the dividing line in contract works insurance vs public liability.

Do subcontractors need contract works insurance as well as public liability?

Often not, when the head contractor or principal insures the whole job under one contract works policy. Subcontractors still need their own public liability for their own work, and the subcontract should say who insures the works. Ask the head contractor for the certificate of currency rather than assuming the job is covered.

Is construction insurance the same as contract works insurance?

In everyday use, mostly yes. Construction insurance is the term most Australians search for, while insurers call the works cover contract works, construction works or contractors all risks. Some construction policies include a public liability section and some do not. The schedule shows which sections you hold and the limit for each one.

Which policy pays if my own worker is injured on site?

Neither of them. Injury to your own employees is a workers compensation matter, which in Victoria means WorkCover, administered by WorkSafe Victoria. Public liability wordings commonly exclude it, and contract works never covered injury in the first place. Check whether any contractor you engage could be treated as your worker under the scheme.

The post Damage to the job or others: contract works vs public liability appeared first on Fortis Risk Solutions (FRS).

Who asks for it, and why a sole trader feels it most

The request usually comes before you are allowed to trade. A council issuing a street trading or event permit, a market organiser taking stall bookings, a landlord leasing you a studio or shopfront, an event organiser, or a client whose home or premises you work in. Each of them could be drawn into a claim if a member of the public is hurt, so they want to see that a policy sits behind you.

The City of Melbourne is a clear example. Its guidance says anyone applying for a permit to conduct an activity in municipal public space, such as street trading or an event, must have public liability insurance and supply a copy of the certificate of currency. business.gov.au makes the same point for markets: many market organisers require you to insure your stall.

The stakes are personal for a sole trader. There is no company between the business and you, so a claim for a customer’s injury is a claim against you and your own assets.

The limit is set by whoever is asking

There is no single figure for every market or permit. The organiser, council or landlord writes the limit into its conditions, and you need to meet the highest one among the places you trade. The City of Melbourne, for instance, requires all of the following before it issues a permit:

• Cover of at least 20 million dollars for a single claim.
• Public and products liability, or general liability, matched to the activity.
• The applicant named on the certificate as the insured.
• The City of Melbourne named as an interested party.
• An insurer on the APRA register of authorised insurers, or an approved alternative.
• A certificate kept current for the life of the permit.

Other councils and private markets set their own terms. Read the stallholder conditions for each market before you buy, because raising a limit or adding an interested party after the policy starts needs the insurer to endorse it, and that takes time. For a fuller look at choosing a figure, see our article on how much public liability insurance you need.

Products liability matters if you sell goods

Public liability covers injury and damage caused by your activities, such as a customer tripping over a gazebo weight or a table collapsing onto someone. Goods you sell are a different risk. business.gov.au says stallholders may need both public liability and product liability insurance, and that food stalls face extra obligations under the food safety standards. Candles, skincare, toys, homemade food and anything electrical all carry product risk once they leave your table.

Public liability insurance for market stalls is commonly written as a combined public and products liability policy. Check that the products section is there, and that the description of what you sell matches your actual range. Our article on product liability vs public liability explains how the two sections differ.

One day cover or an annual policy

Both exist. Some insurers sell cover for a single event or a set number of trading days, and others write an annual policy for the activities you declare. Which suits you depends on how often you trade and what else you do. A few points apply either way:

• The policy dates must cover the event dates, including set up and pack down. business.gov.au specifically warns stallholders to check that set up and pack down time is included.
• The activity described on the policy has to match what you do on the day.
• If the market includes insurance in the registration fee, business.gov.au suggests you understand exactly what it covers. You can take out your own cover as well.
• A sole trader who also does other work, such as cleaning, gardening or mobile services, usually needs that work declared too. A stall only policy will not respond to it.

The certificate the organiser checks

Proof of public liability insurance for sole traders is a certificate of currency. Organisers check the insured name, the limit, the policy period and the activity. For a sole trader the insured should be your own name, which business.gov.au confirms is a sole trader’s legal name, with your business name alongside it if you use one. Our guide to what a certificate of currency shows covers the common reasons certificates get rejected. Diarise your renewal date and send the new certificate to every market that holds the old one.

What public liability does not cover

It pays for other people’s injuries and property, not yours. business.gov.au notes that workers compensation does not cover a sole trader, and points to accident and sickness insurance for loss of income while you recover. That cover is set out on our personal sickness and accident insurance page. Your own stock, gazebo and payment terminal also sit outside public liability. Portable equipment cover, which business.gov.au describes as cover for tools and equipment you take with you, is the usual answer for those.

What FRS does

We read the stallholder conditions, permits and leases you trade under, set one limit that satisfies all of them, and check that the products section and the activity description match what you actually sell and do. We arrange certificates with the right interested parties named, and we review the policy when you add markets, products or new work.

For wordings, limits and certificates, see our public liability insurance page.

Frequently asked questions

Do sole traders legally need public liability insurance?

Not as a general rule. business.gov.au says some states and territories require it for certain occupations. For most sole traders it becomes compulsory through a contract, lease, council permit or market booking. A sole trader is personally responsible for the business, so a claim without cover is paid from your own money and assets.

Does the market's own insurance cover my stall?

Sometimes, but only on its own terms. Some established markets include insurance in the registration fee. business.gov.au suggests you find out exactly what it covers before relying on it, and you can take out your own policy as well. Ask whether it covers products you sell, your set up and pack down time, and other markets.

Is one day public liability insurance for market stalls enough?

It can be, if you trade rarely and the policy dates cover the whole event, including set up and pack down. Regular stallholders often find an annual policy simpler, since each certificate then covers every market on the calendar. Check that the limit meets each organiser’s conditions and that your products are declared.

Does public liability insurance for sole traders cover my own injuries?

No. Public liability pays for injury to other people and damage to their property. business.gov.au notes that workers compensation does not cover a sole trader and points to accident and sickness insurance, which can pay you a benefit for lost income while you recover. Consider both if your work is physical.

The post Trading at markets as a sole trader: public liability explained appeared first on Fortis Risk Solutions (FRS).

Insurable gross profit is not the figure in your accounts

business.gov.au describes business interruption insurance as cover that pays your ongoing business costs if an insured event, such as a fire damaging your business property, interrupts your business. The policy measures that through gross profit, but it uses its own definition.

A common Australian definition starts with turnover, adjusts for the change in stock and work in progress, and then subtracts only the uninsured working expenses listed in the schedule. Those are the costs that fall away when sales stop, typically purchases of stock and materials, and sometimes freight, packaging or discounts. Everything else stays in: rent, salaries, loan repayments, insurance, advertising and net profit.

That is why insurable gross profit is usually higher than the gross profit line your accountant prepares. An accountant often deducts wages and other direct costs that a business interruption wording treats as continuing. If you set the sum insured from the accounting figure, you can be underinsured before anything goes wrong. Check how your own policy treats wages, since some wordings include them in gross profit and others insure them as a separate item with its own limit.

How is business interruption insurance calculated, step by step

Most wordings build the claim in three parts.

1. Reduction in turnover. The turnover you would have earned is compared with what you actually earned during the indemnity period. The benchmark is usually the turnover for the matching months before the damage, adjusted for trends and circumstances that would have changed it anyway. The shortfall is multiplied by your rate of gross profit, which is gross profit as a percentage of turnover.
2. Increased cost of working. Extra spending to keep trading and reduce the loss, such as temporary premises, hired equipment, overtime or outsourcing. It is commonly capped at the gross profit that spending saved. Some policies add a separate limit for extra costs above that cap.
3. Savings. Insured costs that stop while you are closed, such as a cleaning contract you suspend, are deducted.

The result is limited by the sum insured and by the indemnity period, the maximum time the insurer pays for. Choosing that period is a separate decision, covered in our article on how long the indemnity period should be.

A worked example with round numbers

The figures below are made up to show the arithmetic. They do not describe a real business or a real claim, and your own wording may calculate some steps differently.

The temporary site earned $200,000 of the turnover that would otherwise have been lost. At 60% that saved $120,000 of gross profit, so the full $50,000 spent to earn it sits within the usual cap.

Now assume the sum insured was $450,000 instead of the $600,000 the business needed. Many wordings reduce the claim in proportion to the shortfall: $450,000 divided by $600,000 is 75%, and 75% of $460,000 is $345,000. The business carries the other $115,000 itself. Our article on underinsurance and setting sums insured explains how that provision works across a policy.

What sets the sum insured and the premium

The sum insured is your estimate of insurable gross profit for the year ahead, scaled up when the indemnity period is longer than 12 months. A growing business should declare where it is heading, not where it was last year. Some policies are written on a declaration basis, where you declare an estimate at the start and adjust it once the actual figures are known.

Insurers set the premium from that sum insured and the indemnity period, along with your trade, your premises and your claims history. The same calculation logic applies whether the cover sits in a business pack or in a larger property policy.

Records the calculation depends on

Every number above has to be proved. The Insurance Council of Australia’s guidance on business interruption claims lists what insurers commonly ask for:

• BAS lodgements with ATO receipts for the last year, used to verify gross profit.
• Financial year profit and loss statements, including a detailed trading account.
• Quarterly, monthly and, where needed, weekly trading figures if you have them.
• Evidence of payroll costs, if the policy covers payroll.
• Your lease, any franchise agreement, and correspondence with the landlord about rent relief.

The same guidance says insurers may want figures for earlier years too, along with when and why the business closed and whether it could still trade at reduced capacity. The ATO requires most business records to be kept for five years and stored in a way that protects them from being damaged. A fire that triggers the claim can also destroy the paperwork, so keep copies off site or in cloud accounting software.

What FRS does

We rebuild your insurable gross profit from your accounts using the definition in your wording, test the sum insured against the indemnity period you hold, and flag where wages or other costs are treated differently from what you expect. After a loss, we work with you and your accountant on the figures the insurer needs and stay involved through the claims process.

To review your own settings, see our business interruption insurance page.

Frequently asked questions

Is business interruption calculated on revenue or on profit?

On gross profit as your policy defines it, not on revenue and not on net profit. The usual definition takes turnover and subtracts only the uninsured working expenses, such as stock purchases. Continuing costs like rent and salaries stay inside the figure, which is why the insurable amount is often higher than the gross profit in your accounts.

Are staff wages included in a business interruption claim?

It depends on the wording. Some policies include wages inside gross profit, so they are paid as part of the lost gross profit. Others insure wages as a separate item, sometimes with a shorter period or a lower limit. Check the schedule, because the way wages are treated changes the sum insured you need.

What happens if my business interruption sum insured is too low?

Many wordings reduce the claim in proportion. If the business needed $600,000 of cover and insured $450,000, an insurer applying that provision would pay 75% of the assessed loss. The shortfall stays with you. Review the figure at every renewal, especially after growth, a new site or a change in how you buy stock.

How is the claim worked out if sales were growing?

Most wordings let the benchmark turnover be adjusted for trends and circumstances that would have affected the business anyway. If sales were rising before the damage, the expected turnover is lifted to reflect that. You will need evidence, such as monthly trading figures, signed contracts or new customers already won, so keep those records current.

The post Gross profit and extra costs: how a BI claim is calculated appeared first on Fortis Risk Solutions (FRS).

The kind of loss decides which policy responds

Start with what went wrong, not with your occupation. business.gov.au describes professional indemnity insurance as cover for the cost of legal action over claims against your professional advice or services, including mistakes, neglect or breaches of contract that cause a loss for your client. It describes public liability insurance as cover for when someone dies, is injured or has their property damaged because of your negligence.

So a client who paid too much, missed a deadline or lost a sale because of your work points to professional indemnity. A person who tripped over your equipment, or a client whose floor you damaged, points to public liability. Public liability can still pay a financial loss, but only one that follows physical harm: business.gov.au lists consequential loss, where negligence causes another business to lose expected revenue, among the things it may cover. A fire you start in a shared building that closes the shop next door is one example.

Professional liability and professional indemnity are the same cover

Contracts and insurer websites use both names, which is where the confusion starts. In Australia the policy is usually sold as professional indemnity. Professional liability is the name some insurers use, and the one common in contracts drafted overseas. Both describe cover for claims that your professional work caused a client a financial loss. When a contract asks for professional liability, a professional indemnity policy at the stated limit normally answers it. Check the definition in the contract if you are unsure, and ask the client in writing rather than guessing.

Where tradies and consultants fall between the two

The gaps sit at the edges of each policy. Public liability wordings commonly exclude claims arising from professional advice or design given for a fee. Professional indemnity wordings commonly exclude bodily injury and property damage, although some policies written for engineers, architects and other design professions include it where the harm flows from a breach of professional duty.

That matters for anyone who both advises and does the work. A tradie who designs a system and then installs it, a builder who prepares the drawings on a design and construct job, or an IT contractor who recommends a setup and then configures it on site can face either kind of claim from the same job. The installation and the site visit belong to public liability. The design and the recommendation belong to professional indemnity.

Neither policy is designed to pay for redoing your own work. Public liability commonly excludes damage to the work you performed, and professional indemnity pays the client’s loss, not the cost of fixing a job you simply did badly. Treat that as a business risk, priced into your quotes.

Why the two policies behave differently

Public liability is commonly written on an occurrence basis. The policy in force when the incident happened responds, even if the claim arrives years later. Professional indemnity is written on a claims made basis, so the policy in force when the claim is made responds, which is why a professional indemnity policy has to stay current after a job finishes. Our article on management liability vs professional indemnity explains claims made cover and retroactive dates in more detail.

The limits look very different too. Public liability limits of 10 million or 20 million dollars are commonly requested, while professional indemnity is commonly requested at 1, 2 or 5 million dollars. Neither figure is set by law for most businesses. They come from contracts, permits and professional bodies, and business.gov.au notes that professional indemnity is mandatory for some professions.

What a contract or permit will spell out

When a client sends an insurance clause, the professional indemnity vs public liability question is usually answered for you. Read the clause for:

• The class of each policy it names, such as public and products liability, professional indemnity, or general liability.
• The minimum limit for each, and whether it applies per claim or in the aggregate.
• How long cover must stay in place after the work ends, which is common for professional indemnity.
• Whether the client must be noted on the policy as an interested party.
• When a certificate of currency is due, and at which renewals.

Councils draw the same line. The City of Melbourne’s public liability guidance asks permit holders for public and products liability, or general liability, of at least 20 million dollars for a single claim, and says professional indemnity may be required for certain permits, such as planning or advice based permits. The activity decides the class.

What FRS does

We read your contracts and permits, list which classes and limits each one demands, and check the business description on both policies against the work you actually do, including any design or advice you give alongside a trade. Where a job carries both kinds of risk, we place both covers and make sure the gaps between the two wordings are known before you sign. Both often sit inside a wider business insurance program.

For the injury and damage side, see our public liability insurance page. For advice and design, start with our professional indemnity insurance page.

Frequently asked questions

Do I need both professional indemnity and public liability?

Often, yes. If you give advice or design and you also visit sites or work on client premises, one job can produce a claim for financial loss and a claim for injury or damage. Each policy commonly excludes the other’s risk. A consultant who never leaves the office may need little public liability, but most contracts still ask for it.

Is professional liability insurance the same as professional indemnity?

Yes, in practice. Professional indemnity is the usual Australian name, while professional liability is used by some insurers and in contracts drafted overseas. Both cover claims that your professional work caused a client a financial loss. If a contract asks for professional liability, a professional indemnity policy at the stated limit normally satisfies it. Confirm with the client in writing.

Does public liability cover a mistake in my advice?

Generally not. Public liability commonly excludes claims arising from professional advice or design given for a fee, because that risk belongs to professional indemnity. It responds when your activities injure someone or damage their property. If the only loss is money, such as a client overpaying or missing a deadline, the claim points to professional indemnity.

Why are public liability limits so much higher than PI limits?

Because the worst cases differ. A single fire or serious injury can produce a very large claim, so contracts and councils commonly ask for 10 or 20 million dollars of public liability. Professional indemnity claims are usually financial and are commonly requested at 1, 2 or 5 million dollars. Your contract sets the figure, not a law.

The post Mistake in your work or injury on site? PI vs public liability appeared first on Fortis Risk Solutions (FRS).