Public Liability Insurance

A construction site injures third parties, damages neighbouring property and undermines buildings it was never meant to touch. Public liability is what stands between those events and your balance sheet. It differs from contract works in one respect that matters. A contract works sum insured is derived from the contract value. A liability limit is chosen — usually by copying the number in the contract, which was copied from the contract before it. What varies between programs is the limit basis, whether defence costs sit inside it, the vibration and removal-of-support position, the treatment of uninsured subcontractors, how far the contractual liability exclusion reaches, and whether products liability responds at all once the project is finished.

Where the value sits

What is taken for granted — legal liability for third-party personal injury and property damage arising from the works — is common ground. An excellent program is decided by what sits around it.

Vibration, weakening and removal of support — the extension that matters most on excavation, underpinning and demolition beside existing structures.
Products and completed operations — the cover that responds after handover, and the cover a project-specific policy leaves out.
Principals’ indemnity and cross liability — so every party is protected without claiming against each other.
Uninsured subcontractors — cover where a sub’s own policy lapsed, was cancelled, or never matched the subcontract.
Defence costs in addition to the limit — so a three-year dispute doesn’t consume the indemnity before liability is decided.

Where projects get caught out

A contract works dispute is rarely about whether there was a policy. It is about one of these.

The limit was copied from the last contract. Third-party exposure scales with what is next door, not with contract value. A $30M project beside an operating hospital carries more risk than a $200M greenfield.
Products liability ran out with the project. Project-specific cover ends at completion; injury and damage arising from finished work does not. Liability is occurrence-based, so an incident after expiry has no policy to attach to.
Defence costs sat inside the limit. A long dispute can consume a material share of the indemnity before liability is even determined.
Worker-to-worker and labour hire. Injury to a subcontractor’s worker sits between workers compensation, the sub’s policy and yours. The exclusions here vary between wordings and are routinely misread.
Vibration and removal of support was excluded or limited. Standard on most wordings. On deep excavation, underpinning or demolition beside existing structures it is the most likely claim you will have — and it must be bought back.
Care, custody and control. Damage to the property you are working on is excluded — that belongs to contract works. Gaps appear where the two policies draw the boundary differently.
The indemnity clause went beyond common law. Liability assumed under contract that would not exist at law is commonly excluded. An onerous indemnity transfers risk the insurer never agreed to carry.
Silica, asbestos and hot works. Conditions on these are tightening. A breach of a hot works warranty can decline an otherwise valid fire claim.
The subcontractor wasn’t insured after all. A certificate proves a policy existed on a date. Principal contractors remain exposed to subs whose cover lapsed, was cancelled, or never matched the subcontract.

Annual, project-specific, or principal-arranged?

Most developers and builders need two of the three: an annual policy carrying the products liability tail, and project or principal-arranged cover sized to the projects that would exhaust it. We model where that line sits before you commit to either.

Annual policy
Covers every project you run, renewed continuously.
- Includes products and completed operations — the cover that responds after handover.
- One program, one renewal, one claims relationship across the business.
- The limit is shared by every project running that year, and a claim on one affects the rate on all of them.
Project-specific
Covers a single project for its construction and defects liability period.
- A dedicated limit that no other project can erode, underwritten on that project’s actual risk.
- Does not include products liability — the cover ends with the project, the exposure does not.
- Suits high-value, high-hazard or joint-venture projects where the principal wants control.
Developer-arranged (PCIP / OCIP)
One liability program covering every party, placed alongside the contract works section.
- Cross liability and principals’ indemnity built in rather than bolted on.
- No disputes between separate parties’ insurers.
- A limit sized to the project rather than to the smallest contractor on it.

What we do

One program, managed across the life of the project — from feasibility to final claim.

PHASE 1
Before you commit

Feasibility, design development and tender

Project risk and opportunity workshops. What can go wrong, what it costs, what’s insurable, and what should be engineered out rather than insured.

Insurance cost implications of design and methodology. Timber versus concrete, prefabrication, top-down construction, deep excavation beside existing structures — priced while the design can still change.

Contract indemnity and insurance clause due diligence. What the contract obliges you to carry, what it leaves you exposed to, and what to redline — before execution.

Due diligence on other parties’ insurances. A certificate of currency proves a policy existed on a date. We verify the cover behind it responds to your project.
PHASE 2
Before you break ground

Placement

Project Risk Prospectus. An underwriting submission built so the market competes for the risk rather than pricing the unknown.

Stakeholder briefing documentation. The program explained in the terms financiers, JV partners and boards each need.

Negotiating value-for-money placement. Best total cost of risk across premium, retention, limits and exclusions — with extended coverage.

Leverage Latent Defects Insurance. Apply the risk management from the TIS (Technical Inspection Service) and obtain lower rates due to the higher-quality asset.
PHASE 3
On site and beyond

Protection

Claims and site risk protocols. Who notifies, in what timeframe, what evidence is preserved, who speaks to the loss adjuster — agreed before the first claim.

Strategic claims management. Large construction claims are negotiations. We run them with the engineering, quantum and contractual argument prepared from day one.

Why SHC Insurance Brokers?

Placing construction risk since 1989 Leverage of SHC Insurance Brokers 37 years in the Australian market, across cycles, code changes and hard markets.
Construction is not a division here — it’s the business. Specialist depth no generalist can match. Latent defects, contract works, liability, professional indemnity and plant.
First to market with Latent Defects Insurance in Australia
Insured $8bn worth of construction projects in the last 12 months.

Frequently asked questions

Do I need public liability insurance to get a builder's licence?

In most states, proof of public liability cover is required as part of a builder's licence application, and ongoing cover is generally a condition of keeping that licence current.

What is a Certificate of Currency, and why do I need one?

A Certificate of Currency is proof that your public liability policy is active. Principals, developers, and councils commonly request one before allowing you to start work or to verify cover is in place throughout a project.

Does public liability cover damage to my own work?

No. Public liability responds to third-party injury or property damage. Damage to your own works or materials is a contract works matter.

How much public liability cover do I need?

Cover limits are commonly set by head contracts or principal requirements, and often sit between $10 million and $20 million on construction projects, though this varies by project scale and contract terms. Usually you can expect to take out $20 million as a minimum with a $50 million cover for larger projects.

Does public liability cover subcontractors on my site?

This depends on how the policy is structured. Subcontractor liability, cross liability between parties, and products liability can typically be included, and should be discussed when the policy is arranged.

Is public liability insurance compulsory?

It isn't compulsory by law in the way strata insurance is, but it is a near-universal contractual and licensing requirement across the construction industry.