What is public liability insurance for builders and why does it matter?
Short answer
Public liability insurance covers a builder for damage to property they're not working on, or injury to people in connection with their work — things like a tool slipping into your kitchen window, scaffolding falling on a neighbour's car, water damage from a plumber's mistake. It's not legally required, but no competent NZ builder operates without it. Ask for a current certificate of currency before signing the contract.
Key facts
- Not legally required, but standard
- Typical cover: $2-5 million per claim
- Some events excluded: faulty workmanship, professional design errors
- Builder's risk insurance is separate — covers the build itself in progress
- Insurance for materials on site is yet another policy (usually contractor-supplied)
What public liability does and doesn't cover
Covers: third-party property damage (e.g., builder cracks a tile drilling), third-party injury (someone trips on builder's gear and breaks their ankle), some pollution events.
Doesn't cover: faulty workmanship that fails later (that's a defects claim against the builder, not insurance), the building itself being damaged during construction (that's contract works / builders risk), the builder's own tools (separate policy).
What to check on the certificate
Insurer name and policy number. Period of cover — current and runs past your build end date. Sum insured — $2-5 million is typical. Insured party — the actual company doing your build, not a parent/affiliate.
Builders sometimes hand over a certificate from a previous job that's since expired. Always sight one dated within the last few months.
Knowing the rules is half the job. The other half is knowing who you're hiring — check any NZ builder's court action, insolvency history, director track record and AI risk score in minutes.
Related questions
Sources: Insurance Council of NZ; Standard public liability policy wording. General information for NZ homeowners, not legal advice — building rules change and vary by council, so confirm critical details on the official source before acting. Last updated 2026-05.