What Does Public Liability Insurance Cover? Real Examples of Claims for Malaysian Small Businesses

The short answer

Public liability insurance covers your legal liability if a third party, such as a customer, visitor or passer-by, is injured or has their property damaged because of your business activities or premises. It also typically covers the legal costs of defending the claim. The examples below show the kind of everyday incidents it is designed for.

What is public liability insurance?

It protects your business from claims made by people who are not your employees. If someone is hurt or their property is damaged and they say it was your fault, the policy responds to the valid claim, up to the limit and subject to the terms. It does not cover your own staff, your own property or professional mistakes. Read more on our public liability insurance page.

Everyday examples

A customer slips in your shop.
Water was left on the floor after mopping. The customer falls and injures their wrist, and claims for medical treatment and time off work. This is bodily injury to a third party.

A signboard falls on a parked car.
A signboard on your shopfront comes loose in heavy wind and damages a car parked below. The car owner claims for repairs. This is third-party property damage.

A contractor damages a client's property.
An air-conditioning technician drills into a hidden water pipe in a customer's home, causing water damage to flooring and furniture. The customer claims against your business.

A visitor is hurt at an event.
A guest at your promotional event trips over a cable and injures their ankle.

A delivery rider damages a customer's door.
While carrying a heavy item in, your rider knocks the door frame and cracks it.

These are illustrative scenarios, not specific client cases. Whether a particular incident is covered depends on the policy terms and the facts.

What public liability insurance usually does not cover

• Injury to your own employees (see workmen's compensation)
• Damage to your own premises or stock (see fire insurance)
• Professional advice or design errors (see professional indemnity)
• Deliberate acts
• Goods in your care, custody or control, which may need separate cover
• Vehicle accidents, which fall under motor insurance

Who typically needs it?

• Shops, restaurants and cafes
• Offices that receive visitors
• Contractors and service providers who work at customers' premises
• Event organisers
• Landlords and tenants, since leases often require proof of cover. See why landlords ask for public liability insurance.

Common questions

Is public liability insurance compulsory in Malaysia?
It is not usually a blanket legal requirement for small businesses, but it is very often required by landlords, clients, main contractors and event organisers. Some licences or contracts may call for it, so check what applies to you.

Does it cover me if I work from home?
It can, if you receive clients or carry out business activities that could injure others. Tell your broker how you operate.

What if a customer's claim is unfair?
The policy typically helps with the legal costs of defending a claim, whether or not it succeeds, subject to terms and the insurer's consent.

Is public liability the same as professional indemnity?
No. Public liability deals with physical injury and property damage. Professional indemnity deals with financial loss from professional advice or services.

Related reading

For the full guide, including risks, industries and how to manage them, see Understanding Public Liability Insurance: Risks, Coverage, And More.

Hear it from David Teh

For a quick overview of the main types of business insurance, founder David Teh walks through the coverage types found on SME packages in under 20 minutes on the Cover Buddies Podcast. Read the episode page, listen on Apple Podcasts or Spotify, or watch on YouTube.

Work with Cover Buddies Today!

Want to check that your business is protected against third-party claims? Cover Buddies can help. Explore Public Liability Insurance, get a quote or WhatsApp us.