Public Liability versus Professional Indemnity: What's the Difference?

Find out what the difference is between public liability and professional indemnity insurance, and what type of thing each can cover.

Choosing the right insurance is vital to maintain financial security, a good reputation and peace of mind. The correct cover can help protect you and your business from unexpected losses and the often-harsh ramifications of legal claims.

When it comes to public liability versus professional indemnity insurance, there can often be some confusion. Understanding the difference between the two is important to fully protect your business in the event of a professional mistake, property damage or injury to a third party.

Public liability insurance protects businesses against injury or property damage claims by third parties. It covers legal defence fees, compensation and medical expenses from accidents that occur because of your business activity and when you are at fault.

The types of risks covered include:

• Slips and falls

• Accidental damage to property

• Injuries caused by faulty products

Public liability insurance can be helpful for public-facing businesses. Retail stores, restaurants, construction companies and event organisers are just a few businesses it can benefit. If your business interacts with the public regularly, public liability insurance could be a wise investment.

Professional indemnity insurance protects businesses and individuals against claims of negligence and errors in professional services or advice. It covers legal defence costs and any compensation awarded to the claimant.

Claims often involve financial loss due to things like:

• Incorrect advice

• Miscalculations

• Failure to deliver promised services

Professionals who would benefit from professional indemnity insurance include consultants, accountants, lawyers and IT professionals. Essentially, anyone in an advice-giving or service-based role in which clients rely on your expertise.

The key distinction in the public liability vs professional indemnity comparison is that the former deals with physical accidents and damage, while the latter addresses professional errors and negligence. Both offer financial protection for legal defence and but involve different risks and claim types.

Public liability insurance

Covers claims from third parties for injury or property damage because of negligent business activities. For example, if a customer slips in a store, public liability insurance handles the claim.

Professional indemnity insurance

Protects against claims of negligence or errors in professional services. For instance, if an accountant provides incorrect advice causing financial loss, professional indemnity insurance covers the legal and compensation costs

When choosing the right insurance to protect your business, you must consider a few important factors.

• Consider the nature of your business, industry standards and the level of risk associated with your business activities. Identify any financial or legal vulnerabilities you might face in your field.

• It’s always wise to consult with insurance professionals for tailored advice. They can help you understand policy details and recommend suitable coverage. The more you know, the more protected your business should be.

• Combining different insurances can offer protection over several areas. Regularly review and update your insurance to ensure it meets changing business needs.

Public liability insurance offers protection against injury or property damage due to business activity, while product liability insurance covers harm caused by faulty products. Tailored solutions for your business are important. As are regular policy reviews and proactive planning. Ensure your coverage remains sufficient as business activities change.

Consider your business needs carefully. Factors like the nature of products, operations and potential liabilities need to be taken into account.

If you’re in need of extra protection, we offer both public liability and product liability insurance.

Contact us for a public liability insurance quote today, either online or by phone on 0330 828 1416.

Get in touch with Everywhen for a professional indemnity insurance quote suitable for your profession today.

If you are a tradesperson, you can get a direct quote online or call us on 0330 123 5741.