How do I get public liability insurance?

Brisbane Public Liability InsuranceThe internet has made it very easy to get covered for public liability insurance.

But whilst it’s easy to get cover, it’s more important to make sure you’re getting the right cover.

There are a few options for comparing and taking out a policy, and in this guide we’ll run through those options and tell you which one we think is best.

Obtaining and comparing quotes

Step one is to get a quote on your insurance.

There are three main options for obtaining quotes, as we have detailed below:

  • Contact an insurance company directly
  • Contact an insurance broker
  • Use an online service

If you have little or no understanding of business insurance, and are not interested in learning, then your best option is probably to use an insurance broker.

The broker will be able to speak to you about your needs, recommend a suitable policy and provide you with quotes, and then put the cover in place if you wish to do so.

If you’d rather be more hands-on with your insurance you can ring around to a few insurance companies yourself.

The insurance companies will provide you with quotes either via their call centres or their websites, but it’s important to remember that unlike a broker they will not be able to give you any advice.

An increasingly popular option is the use of websites to obtain and compare public liability insurance quotes.

If you’re going with this option it’s important to make sure you are dealing with a reputable website, preferably one that is run by a licensed insurance firm.

Going ahead with a policy

Once you’ve compared the quotes and have decided on a policy, the next step is to go ahead with a policy.

The method for this step depends largely on how you obtained your quotes.

If you obtained quotes via an insurance broker, they will walk you through the process of taking out the policy.

If you received your quotes directly from an insurance company you would contact them to proceed, and if you used a website generally they will have functionality allowing you to proceed online.

In most cases you will be required to complete an additional form known as a proposal.  This basically just confirms the information that you provided during the quote stage.

After that you just need to pay for your policy, and you’ll have a nice new certificate of currency which confirms your business insurance arrangements.

Which is the best option?

The best option to get public liability insurance really depends on your own preferences.

If you are not comfortable with insurance matters and just want to make sure everything is done correctly, then using an insurance broker is undoubtedly the best option.

In some cases it may be slightly more expensive to use a broker, but at least you know it will be done properly, and the time savings will most probably make up for the additional cost anyway.

For business owners who care more about price than anything else, then contacting an insurance company directly or using an online service could be the way to go.

It’s important to remember however that the call centre staff used by the direct insurance companies are generally not qualified or authorised to provide personal advice, so any decisions you make are really on your own head.

The websites can be a bit of a mixed bag.  Some of them simply gather leads and sell the details to other parties, whilst others have their own complex (and very impressive) online quoting systems.

Using a website could be a good idea, but it really depends on the website and whether or not it’s a ‘good’ one.

Qld Stamp Duty Changes to Insurance

Insurance PolicyFrom the first of August 2013 the stamp duty charged on insurance by the Queensland Government will be increasing.

These changes were announced as part of the 2013-14 budget handed down by the Treasurer earlier this month.

Previously most business insurance policies, including public liability insurance, attracted stamp duty of 7.5%.

Other forms of insurance, including professional indemnity insurance, attracted stamp duty of just 5.0%.

With the changes coming in August this year, all forms of insurance (with the exception of CTP) will be charged stamp duty of a rate of 9.0% including GST.

As far as business insurance goes, the changes represent a 20% increase for public liability and a whopping 80% increase for professional indemnity.

Although this seems like a fairly hefty increase, a letter issued to businesses by the Office of State Revenue was quick to point out that the new rates are equal to those charged in NSW and lower than those charged in all other states.

It is certainly a kick in the guts for Qld small businesses, and there is a risk that it will lead to more businesses choosing to operate with either no insurance or inadequate insurance.

In reality the increase in dollar terms will be fairly minor, but in small business every single dollar counts.

New Stamp Duty Rates

The insurance stamp duty rates from 1 August 2013 are as follows:

  • Class 1 General Insurance – 9.0%
  • Class 2 General Insurance – 9.0%
  • Compulsory Third Party Insurance – 10c per policy

Note:  Insurance stamp duty is charged as a percentage of the premium paid and includes GST.

Previous Stamp Duty Rates

The insurance stamp duty rates prior to 1 August 2013 were as follows:

  • Class 1 General Insurance – 7.5%
  • Class 2 General Insurance – 5.0%
  • Compulsory Third Party Insurance – 10c per policy

What’s the Difference Between Class 1 and Class 2?

This question is somewhat irrelevant now since class 1 and class 2 general insurance are both charged stamp duty at the same rate, but here is the answer anyway:

Class 1 – All general insurance types other than class 2 general insurance and CTP insurance.

Class 2 – All general insurance types relating to the following:

  • Professional indemnity insurance
  • Personal injury insurance relating to aircraft travel
  • Motor vehicle insurance other than CTP
  • Home mortgage that is a first mortgage
  • Life insurance riders

More Information

For more information about the Qld stamp duty changes and how they affect your business insurance please contact the Office of State Revenue or your insurance broker.