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Professional indemnity or public liability insurance?

07/11/2019

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 specialist, professional service such as giving advice or designing things.

If a client thinks (and alleges) you’ve made a mistake or been negligent, a professional indemnity policy covers the cost of defending you – whether the claim is valid or not.

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

Professional indemnity insurance covers claims arising from things such as: negligence, defamation, infringement of intellectual property and copyright, 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. Handy if you’re particularly clumsy.

If visitors come to your work premises, or you go out and about, and there’s an accident that someone alleges is your fault, you could be liable. Say someone trips over in your office, falls and is hurt, 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?

Hopefully, that’s helped you decide whether it's professional indemnity or public liability insurance you need.

As an aside, we recommend you have both. Particularly 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 0845 222 5391 if you have any questions. Or you can get a quick quote in just a few clicks, starting with this one.

Image used under license from Shutterstock.

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