Liability Insurance

What is Liability Insurance? 

Despite the very best of intentions, accidents can still happen in any business. Public and Product Liability Insurance protects you against claims for personal injury or damage to a third party. Liability insurance is a broad term for several insurance types that cover your business when someone reports a claim against your company. Unlike other insurance, liability insurance compensates the third party and not the policyholder. 

Liability insurance has subtypes depending on industries. Examples include: 

  • General Liability - protects you against costs associated with lawsuits or claims for bodily harm, injury, or damages sustained within the insured premises. 
  • Product Liability - designed to protect manufacturers of consumer goods and products. 
  • Professional Liability - designed for professionals rendering specialised and often regulated advice or consultancy services, such as accountants, doctors, engineers, architects, lawyers, etc. 
  • Management Liability – a packaged insurance policy designed to protect the leadership of a company against lawsuits or claims as a result of the manager’s actions and decision-making. 
Why is Liability Insurance Important?

Public Liability Insurance is important as it provides cover for a business against the cost of legal action and compensation claims made against your business if a third party is injured or their property suffers damage whilst at your business premises or when you are working in their home, office, or business. 

What does Liability Insurance Cover?

Liability insurance with adequate coverage can shield SMEs from financial difficulties caused by events such as: 

  • Accidents (property damage or bodily injury) within the premises
  • Defective product that caused harm
  • Negligence
  • Damage to third-party property

Choosing the right insurance plan that will cover your risk exposures is key to being fully prepared in case those risks materialise into issues. 

At Insurance Advisernet, we can formulate a liability policy that covers your needs at a premium rate you can afford. Our expert brokers can work with you to identify your needs. Contact us today and let us know how best we can help you!

Frequently Asked Questions

What is an example of liability insurance? 

There are four types of liability insurance: 

  1. General Liability Insurance - covers costs incurred for injuries or physical damage to third parties or caused by your product or service
  2. Professional Liability Insurance - covers professionals rendering specialised and often regulated advice or consultancy services. 
  3. Product Liability Insurance - protects manufacturers of consumer goods
  4. Director & Officers Insurance - protects senior members of management from legal charges while performing their duties as leaders of an organisation 

What is covered by liability insurance in New Zealand?  

The typical coverage of liability insurance includes the following: 

  • Fines, penalties, and court judgements under a range of New Zealand legislation
  • Defence costs
  • Settlements to third parties


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