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Professional indemnity or public liability insurance? What’s the difference?


Professional indemnity and public liability insurance are variations on a theme. Just like mismatched socks.

Time to answer a very common question: should you get professional indemnity insurance or public liability insurance? Or do you need both?

Well, they're kind of similar in the way they both cover claims of negligence against you or your business.

But it’s the type of negligence that makes the difference. It dictates which of the two policies kicks in when there's a claim. Here’s what's what:

What does professional indemnity insurance cover?

Professional indemnity insurance protects you against claims made by clients unhappy with your work. It's essential for anyone providing a professional service such as giving advice, designing things, or completing specialist tasks.

If a client alleges you’ve made a mistake or been negligent, a professional indemnity policy covers the considerable legal costs of defending you – whether the claim is valid or not.

If you are in the wrong, your insurer also pays any damages, awards, rectification costs, or compensation you're liable for – up to your policy's level of cover.

As well as negligence, professional indemnity insurance can also cover claims concerning: defamation; infringement of intellectual property and copyright; loss of documents or data; and the dishonesty of your employees, partners or directors.

What does public liability insurance cover?

Public liability insurance covers your business against third-party claims for injuries or property damage said to be your fault.

If visitors come to your work premises, or you go out and about and there’s an accident, you could be liable. Say someone trips over a cable in your office and falls, breaking a shoulder and smashing their expensive watch in the process.

Claims can be either for the cost of repairing or replacing damaged property or for compensating an injured person - or both.

Public liability insurance pays your legal costs as well as any damages, repair bills or compensation you’re liable for.

So, then...professional indemnity or public liability?

These two types of cover do two quite different jobs. And hopefully, you're now in a better position to decide whether it's professional indemnity or public liability insurance you need.

Or maybe both. Because that's what we recommend. It's particularly important if you’re a contractor or freelancer working with different clients on a regular basis.

That way, you’re covered for everything: the work you do, where you do it and the people you do it with.

Feel free to call us on 0345 222 5391 if you have any questions. Or you can get a quick quote for professional indemnity or public liability insurance in just a few clicks, starting here.

Image used under license from Shutterstock.

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