How well do you understand the difference between these two covers?
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Public Liability (PL) & Professional Indemnity (PI) are different types of insurance policies and cover different occurrences. Although they both cover allegations made against you and your business, the types of claims they cover vary. Depending on the nature of your business, you may require both, or just one of these policies. For some professions, these policies can also be combined into one for your convenience, so you may only have one premium to pay.
Below, we take a look at the coverage under these policies and explain the differences, similarities, and businesses that may need to consider these insurances.
Public Liability vs Professional Indemnity: What do you need to consider?
In deciding whether you need Public Liability Insurance, Professional Indemnity, or both, there are two questions to ask yourself:
- Do you interact with clients or members of the public in person?
- Is your business involved in providing a professional service or advice?
If you answered yes to both, then it’s possible you may need to consider both types of insurance. If you answered yes to just one, then keep reading to consider which one you may need…
Public Liability is designed to provide cover if a member of the public alleges you or your business are legally liable for an injury, or damage to their property. It is designed to assist businesses that have a physical premise, such as an office or store, or have interaction in person with members of the public.
The example most typically used when describing the coverage under this policy is a member of the public slipping and falling at your premises and suing you for an injury they suffer. In reality however, there are many other instances that may result in a Public Liability claim. For example, say you put a sign outside your office about a special offer you’re holding, but don’t end up securing it properly, and the sign falls on someone’s toe just as they’re about to walk into your office. If this individual took legal action against you, you could find yourself facing a Public Liability claim which may include substantial legal bills to defend yourself, as well as out of pocket expenses in having to pay compensation for their injury.
Public Liability is designed to cover you for the cost to defend a claim covered by the policy , as well as cover the cost of compensation you may be required to pay a third party. It is an important cover for businesses to consider holding if they have any interaction in person with members of the public. To learn more about Public Liability Insurance, what it covers and doesn’t cover, you can read our detailed guide on Public Liability Insurance here.
Professional Indemnity Insurance is designed specifically for businesses who provide a professional service or advice. It is designed to cover you and your business if a client alleges your professional service or advice caused them a financial loss. Again, in this instance, PI would help cover the legal fees you incur in defending a claim covered by the policy, as well as compensation you might be required to pay your client. Examples of occupations that may typically be required to hold PI include allied health professionals, accountants, PR agents, and real estate agents. You can find out more about Professional Indemnity, what it covers and doesn’t cover in our detailed guide to Professional Indemnity Insurance for small business owners.
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