Public vs. Broadform Liability Insurance: Which Suits Your Business?

Many business owners are unsure whether Public Liability or Broadform Liability Insurance is right for their business. Making the right choice protects you from serious financial, legal, and contractual risk. Whether you run a guesthouse, manage a building site, or operate a busy retail space, understanding the difference matters more than ever.

This guide from the Auto&General Insurance team breaks down exactly what each policy covers, which businesses need what, and how to make the smart choice before it costs you.

The cost of having the wrong Business Insurance in today’s climate

It's common knowledge that owning a business comes with risk. But if you don't have the right Business Insurance, you could end up paying the price in ways you don't expect. It isn't only a volatile economic landscape you have to worry about, but also social, weather, and liability risks. Failing to choose insurance that aligns with your specific business operations could be the very thing that spells disaster for your company.

The civil unrest that affected large parts of KZN in 2021 resulted in a phosphorus warehouse going up in flames 1. Under certain circumstances, phosphorus is a hazardous pollutant, and this fire resulted in significant pollution to the surrounding environment, particularly the aquatic habitat. Without the right business insurance, the warehouse owners would have faced crippling costs relating not only to cleanup but also to any liability claims raised then and in future.

Financial risk exposure

Many businesses were unable to operate during the COVID-19 lockdowns. However, months after the lockdowns ended, many businesses were still dealing with supply issues. Interruptions in business operations, weather-related property damage, and seemingly simple liability claims could all bankrupt your business if you haven't adequately insured it with the right policy type.

Reputational damage

One bad customer experience can spiral out of control online. If you don’t have the correct insurance to step in quickly and help manage the situation, your business reputation can suffer long-term damage, especially in industries that rely on trust, like hospitality, banking, education, or personal services.

Legal consequences

In many sectors, including construction and logistics, businesses are legally required to hold specific insurance to operate or tender for work. If your insurance doesn’t meet regulatory standards, you could face penalties—or be shut out of critical projects and partnerships altogether.

Missed business opportunities

Businesses often miss out on contracts or supplier agreements because they can’t provide proof of the appropriate liability cover. This can stall growth and force you to turn down work that could have transformed your business. Not forgetting the professional polish, having the right insurance adds to your business and establishes trust.

Business interruption risks

Unforeseen events—like a fire caused by faulty wiring you installed, or injury caused by a defective product you sold—can bring operations to a standstill. If your insurance doesn’t cover these scenarios, you may have to cover the costs associated with claims and the loss of income while your business recovers.

Choosing the wrong policy may feel cheaper in the short term, but it can cost your business far more in the long run. Broadform Liability Insurance is designed to match the complexity of your business needs, but how does it differ from Public Liability Insurance?

The difference between Public Liability and Broadform Liability – what's best for your business?

Liability Insurance isn’t one-size-fits-all. The type of cover your business needs depends on the nature of your work, the risks you face, and the people you deal with daily. Two of the most common types of business liability insurance are Public Liability and Broadform Liability Insurance, and while they sound similar, the difference between them could make or break your business in a crisis.

1. Scope of cover: What risks are included?

Public Liability Insurance covers third-party injury or property damage that occurs on your premises or due to your standard business operations. Think slips, trips, and minor accidents involving customers.

Broadform Liability includes everything Public Liability covers, but goes further to include defective workmanship, completed work risks, and employee negligence, with an element of Product Liability Insurance too. It's essential if you manufacture products, repair or maintain items, or have employees who do this work for you.

2. Industry fit: Who is each one for?

Public Liability is best for businesses with lower operational risks, such as salons, consultants, retail shops, or cafes.

Broadform Liability Insurance suits industries like construction, electrical, plumbing, manufacturing, security, or cleaning services, where there’s greater exposure to risk due to tools, equipment, and high-risk environments.

3. Policy limits and excess: How much protection do you get?

Public Liability often comes with lower policy limits, which may not cover high-value claims. Excesses may be fixed or less flexible.

Broadform Liability policies typically offer higher indemnity limits and options to tailor your excess, which is vital when facing large claims or regulatory obligations.

4. Duration of liability: When does cover end?

Public Liability usually only applies to incidents that happen during the time the policy is active and on-site.

Broadform Liability often includes completed operations cover—protecting you from claims that arise after work is finished, such as a faulty installation causing damage weeks later.

5. Third-party definitions: Who’s covered?

Public Liability usually applies to the general public—customers or visitors to your site.

Broadform Liability can include subcontractors, clients, service providers, and even volunteers or temporary workers, depending on the policy wording, offering much broader protection.

6. Contract compliance: Do your clients require specific cover?

Public Liability might not meet contract requirements for certain industries, particularly on large projects or with government entities.

Broadform Liability Insurance is often required by law or contract, especially for tenders or corporate work, sometimes even by landlords. Without it, you may not qualify for key jobs.

7. Claims process and support: What happens when something goes wrong?

Public Liability offers a standardised claims process for covered events, but the scope of claimable events is narrower.

Broadform Liability allows for a wider range of incidents to be covered. You’ll still get the same responsive support from Auto&General Insurance, but with broader claims eligibility and the comfort that comes with knowing that more complex risks are accounted for.

If your business is low-risk, doesn’t manufacture, repair, or install products, and has limited customer interaction, Public Liability may be enough. But if you work with tools, subcontractors, or complex services—or if your reputation and contracts depend on it—Broadform Liability with Product Liability Insurance is the smarter choice.

Get an Auto&General Insurance quote

Protect your business with the right cover from the start. Get an Auto&General Insurance quote for Broadform Liability today. If you're concerned you might not have the right business insurance, our team will gladly answer your questions.