You’re a builder, a café owner, a photographer, or a consultant. You’ve paid for public liability insurance, and you assume that if something goes wrong with a client’s property while it’s in your hands, you’re covered. That assumption could cost you everything. The “Property in Care, Custody and Control” exclusion is one of the most commonly overlooked clauses in public liability policies, and it routinely leaves Australian business owners without cover when they need it most.
This exclusion operates as a legal carve-out: it removes cover for damage to property that is not owned by you but is temporarily in your possession, under your supervision, or within your physical control. In legal terms, it’s a standard exclusion under most public liability policies, often linked to the general definition of “property damage” in the policy wording. The Insurance Contracts Act 1984 (Cth) requires insurers to clearly disclose exclusions, but the practical reality is that many business owners only discover this gap when a claim is denied. Let’s break down what this exclusion means, how it operates in practice, and what you can do to protect your business.
What Is the Care, Custody and Control Exclusion?
The care, custody and control exclusion (often abbreviated as “CCC exclusion”) is a policy term that excludes liability for damage to property that is in your care, custody, or control at the time of the incident. This typically includes property you are repairing, storing, transporting, installing, or using as part of your services.
For example, if you are a photographer and you drop a client’s expensive camera lens, your public liability insurance will likely not cover the repair or replacement cost. The lens was in your care and control. Similarly, if you are a removalist and you scratch a client’s antique table while moving it, that damage falls squarely within the exclusion.
The legal basis for this exclusion lies in the principle that public liability insurance is designed to cover third-party property damage, not damage to property that you have voluntarily assumed responsibility for. Insurers argue that such risks are better managed through specialised policies, such as contract works insurance, marine transit insurance, or professional indemnity insurance, depending on the context.
Under the Civil Liability Acts of each state and territory, the exclusion is generally enforceable as a standard term, provided it is clearly worded. However, Australian courts and tribunals have occasionally narrowed its application where the insurer’s wording is ambiguous. For instance, a New South Wales tribunal case considered whether “control” meant physical control or legal control, and found that the exclusion only applied where the insured had actual physical custody at the time of the damage. This highlights the importance of reading your policy’s exact wording.
When Does the Exclusion Apply? Common Scenarios
The CCC exclusion is not absolute. It applies only when the property is in your “care, custody, or control.” But what does that mean in practice? Here are the most common scenarios where business owners get caught out.
Repair and Maintenance Work
If you run a repair business—whether it’s electronics, jewellery, machinery, or vehicles—you are regularly handling client property. Damage during repair is almost always excluded. For example, a mechanic who accidentally drops a customer’s engine block while lifting it will not be covered for the repair cost. The property was in the mechanic’s control at the time.
Storage and Warehousing
Businesses that store client goods—such as self-storage facilities, art galleries, or logistics companies—face similar risks. If a fire, flood, or theft damages stored property, the CCC exclusion may apply if the property was in your care. However, note that some policies have a separate “storage” exclusion or a sub-limit. Always check whether your policy includes a specific storage extension.
Installation and Assembly
Tradespeople like electricians, plumbers, and cabinetmakers often damage client property while working on site. For instance, a plumber who accidentally cracks a bathroom vanity while installing pipes may find the claim denied. The vanity was in the plumber’s control during the installation process.
Event and Hospitality Services
Event planners, caterers, and equipment hire businesses frequently handle client-owned items. If a caterer drops a client’s crystal glassware, the exclusion applies. Similarly, if a photographer damages a wedding dress while setting up, the claim is likely excluded.
Transport and Delivery
Removalists, couriers, and delivery drivers are at high risk. If you damage a client’s furniture during a move, the CCC exclusion will typically apply. However, many transport-specific policies offer limited cover for goods in transit, often with a sub-limit or excess.
What Is NOT Covered by the Exclusion?
It’s equally important to understand what the exclusion does not cover. The CCC exclusion only applies to property that is in your care, custody, or control. It does not apply to:
- Damage to property owned by others that is not in your control at the time (e.g., a visitor’s laptop left on a table that you accidentally knock over)
- Damage to property that is not in your physical possession (e.g., a client’s vehicle parked in your carpark that is damaged by a falling object)
- Consequential loss or pure economic loss arising from damage to property not in your control
- Injury or damage to property owned by you or your employees
Additionally, the exclusion does not apply to property that is merely on your premises but not in your care. For example, if a client’s car is parked in your workshop but you are not working on it, and a fire damages it, the exclusion may not apply if the car was not in your control at the time. However, this is highly fact-dependent.
State-by-State Differences and Regulatory Context
While the CCC exclusion is standard across all Australian states and territories, its application can vary slightly due to differences in state Civil Liability Acts and WHS legislation.
New South Wales, Victoria, and Queensland
These states have robust consumer protection frameworks under their respective Civil Liability Acts. In general, the exclusion is enforceable if clearly worded. However, tribunals in these states have occasionally found in favour of insureds where the insurer failed to properly explain the exclusion during the policy sale. Under Section 13 of the Insurance Contracts Act 1984, an insurer must take reasonable steps to ensure the insured is aware of the exclusion before the policy is entered into.
Western Australia and South Australia
These states have similar provisions but with less case law on the CCC exclusion specifically. Insurers in these states tend to rely on standard policy wordings, and disputes are often resolved through the Australian Financial Complaints Authority (AFCA). AFCA determinations have consistently upheld the exclusion where the property was clearly in the insured’s control.
Tasmania, ACT, and Northern Territory
These jurisdictions generally follow the same principles, but smaller claims may be handled through local tribunals with less formal precedent. Business owners in these areas should be particularly careful to read their policy wording, as local insurers may use slightly different definitions.
How to Protect Your Business: Practical Strategies
You cannot always avoid the CCC exclusion, but you can manage the risk. Here are five strategies that experienced business owners and advisors recommend.
1. Review Your Policy Wording Annually
Do not rely on your broker or insurer to tell you what is covered. Read the exclusion clauses yourself. Look for phrases like “property in your care, custody, or control,” “property entrusted to you,” or “property under your supervision.” If the wording is ambiguous, ask for a written clarification.
2. Consider Additional Coverage Options
If you regularly handle client property, consider purchasing a separate policy or an extension. For example:
- Contract works insurance for builders and tradespeople
- Goods in transit insurance for removalists and couriers
- Professional indemnity insurance for consultants who handle client data or documents
- Marine cargo insurance for businesses that ship goods
Some insurers offer a “care, custody, and control” extension as an add-on to a public liability policy, often with a sub-limit of $50,000 to $200,000. This is not standard but can be negotiated.
3. Use Written Agreements with Clients
A well-drafted contract can limit your liability. Include clauses that:
- Exclude or cap your liability for damage to client property
- Require the client to insure their own property
- Define the scope of your responsibility (e.g., “we are not responsible for damage to property unless caused by our negligence”)
However, note that under the Australian Consumer Law, you cannot exclude liability for personal injury or death, and you cannot exclude liability for damage caused by your negligence if it is unreasonable. Always seek legal advice before drafting such clauses.
4. Implement Risk Management Procedures
Prevention is better than insurance. For example:
- Use protective packaging for client goods
- Train staff on handling and storage procedures
- Conduct pre-job inspections of client property and take photos
- Maintain a clean, safe work environment
5. Compare Policies on Aggregator Platforms
Platforms like BizCover allow you to compare public liability policies from multiple insurers. While these platforms are useful for price comparison, they do not always highlight exclusions. Always read the product disclosure statement (PDS) before purchasing. A cheaper policy may have a broader CCC exclusion, leaving you exposed.
Frequently Asked Questions
Does the CCC exclusion apply to damage caused by my employees?
Yes. The exclusion applies to property in your care, custody, or control, regardless of who caused the damage. If an employee damages client property while it is in your control, the exclusion still applies.
Can I purchase a separate policy to cover client property?
Yes. Depending on your industry, you can buy contract works insurance, goods in transit insurance, or a specific care, custody and control extension. These are not standard in public liability policies but are available from many insurers.
What if the client’s property is damaged while on my premises but not in my direct control?
This is a grey area. If the property is simply stored on your premises but you are not actively working on it, the exclusion may not apply. However, if you have assumed responsibility for it (e.g., by accepting it for storage), the exclusion likely applies. Always check your policy wording.
Does the exclusion apply to property owned by my business?
No. The exclusion only applies to property owned by someone else that is in your care, custody, or control. Property owned by your business is covered under your property insurance, not public liability.
How do I know if my policy includes this exclusion?
Look in the “Exclusions” section of your policy document. Common phrases include “property in your care, custody, or control,” “property entrusted to you,” or “property under your supervision.” If you cannot find it, contact your insurer or broker.
Can I negotiate the exclusion out of my policy?
It is rare for insurers to remove the exclusion entirely, but you may be able to negotiate a sub-limit or an extension. This is more common for high-premium policies or specialised industries. Speak to your broker.
Does the exclusion apply to digital property or data?
Generally, no. Public liability insurance covers physical property damage, not data loss. Digital property is typically covered under cyber insurance or professional indemnity insurance. However, if you physically damage a device containing client data, the physical damage to the device may be excluded, but the data loss is not covered by public liability at all.
What should I do if a claim is denied due to the CCC exclusion?
First, request a formal explanation from your insurer in writing. If you believe the exclusion was not properly disclosed, you can lodge a complaint with AFCA. AFCA can review whether the insurer complied with the Insurance Contracts Act 1984. You may also seek legal advice, particularly if the policy wording is ambiguous.
The care, custody and control exclusion is not a trap—it’s a feature of public liability insurance that reflects the limits of the product. But it is a trap if you don’t know it exists. By understanding how it works, reviewing your policy, and considering additional cover where needed, you can avoid the financial shock of a denied claim. In 2026, with premiums for small businesses ranging from $400 to $2,000 per year for standard public liability cover, the cost of a single client property damage claim can easily exceed your annual premium. Don’t let a missing exclusion cost you your business.