Public liability insurance NZ: what it covers and what it costs

Public liability insurance is the cover most New Zealand tradies buy first - and the one your clients ask about before they let you on site. It pays out when your work accidentally injures someone or damages their property, which is why main contractors and commercial landlords usually insist on it. This guide explains what it covers, what it doesn't, whether you are legally required to have it, and what it typically costs - and if you work on your own, whether sole traders really need public liability.

This guide is general information for NZ trade businesses, not financial or insurance advice. Cover, limits and exclusions vary between insurers - always read the policy wording and consider talking to a licensed insurance broker or financial adviser before you buy.

What public liability insurance covers

Public liability covers your legal liability when your work accidentally causes:

Damage to someone else's property - you put a drill through a water pipe, crack a tiled floor, or your ladder dents a client's car.
Injury to a third party - a member of the public or client is hurt because of your work (for example, trips over your gear or is struck by falling material).

It typically pays the cost of the damage or injury plus the legal costs of defending the claim, up to your chosen limit. For most trades this is the everyday risk that turns a small mistake into a large bill.

What it doesn't cover

Your own injuries or your staff's injuries - that's ACC's domain in New Zealand.
Your own tools or vehicle - see tool insurance NZ and commercial vehicle cover.
The job you're building - damage to the work in progress is contract works insurance, not public liability.
Faulty workmanship itself - public liability covers resulting damage, not the cost of redoing work that was simply done wrong. Read the wording carefully here.

Do you legally need public liability insurance in NZ?

There's no general law making it compulsory for most trades. In practice, though, main contractors, commercial clients, property managers and councils routinely require it - often a limit of $1 million to $5 million - before you can start. So while it's rarely a legal must, it's frequently a contractual one.

How much cover and what it costs

Choose a limit that matches the work you do and what your clients require. Light residential work might be fine at $1m; commercial or higher-risk sites often demand $2m-$5m. Cost depends on your trade, turnover and limit - a sole trader often pays from a few hundred dollars a year, more for higher limits or riskier trades. Always compare the exclusions, not just the premium.

How to get the right cover (and a fair price)

Insurance is easy to over- or under-buy. A few practical steps:

Get two or three quotes. Premiums and exclusions vary a lot between insurers for the same trade. Compare like-for-like cover, not just price.
Use a broker for anything complex. A licensed insurance broker can match cover to your trade and contracts - useful once you're running jobs with contract works or higher liability limits. Brokers are usually paid by the insurer, not you.
Read the exclusions and the excess. The exclusions decide whether a claim actually pays out. Check the excess (what you pay per claim) and any per-item limits.
Match cover to your contracts. If a main contractor, council or commercial client requires a specific limit (often $1m-$5m public liability), your policy has to meet it before you can start.

Frequently asked questions

How much public liability cover do I need?

Enough to meet what your clients and head contractors require - commonly $1m-$5m. If you're unsure, a broker can match the limit to your trade and the sites you work on.

Is public liability the same as professional indemnity?

No. Public liability covers physical damage and injury; professional indemnity covers financial loss from advice, design or certification you provide. Some trades need both.

Does public liability cover my faulty work?

Generally it covers damage your work causes to other property, not the cost of redoing the faulty work itself. Check the policy wording - this is a common gap.

My client is asking for a "certificate of currency" - what's that?

It's proof your policy is current, issued by your insurer, showing your cover and limit. Clients ask for it before letting you on site; your insurer or broker can provide it quickly.

How much does public liability insurance cost in NZ?

There's no fixed price - it depends on your trade, turnover and the cover limit you need. As a rough guide, a sole trader at a $1m limit often starts from a few hundred dollars a year, rising with higher limits and riskier work. Get two or three quotes for your specific trade. See also public liability insurance for sole traders.

What is public liability insurance?

Public liability insurance covers your legal liability when your work accidentally damages someone else's property or injures a third party - for example drilling through a pipe or a ladder denting a client's car. It's the cover most NZ clients and head contractors require before you can work on their site.

Sources

Update log

24 June 2026 - Published. General information reviewed against New Zealand industry and government sources (see Sources above).
24 June 2026 - Added cost and "what is public liability insurance" FAQs.

Last reviewed: 24 June 2026.