Public liability or professional indemnity?

Public liability insurance can cover compensation claims if you’re sued by a member of the public for injury or damage, while professional indemnity insurance can cover compensation claims if you’re sued by a client for a mistake that you make in your work.

What is the difference between public liability and professional indemnity?

Public liability insurance and professional indemnity insurance are both business insurance covers designed to cover compensation claims. However, the types of compensation claims they cover can be quite different.


What public liability insurance can cover

Public liability insurance can cover your business for:

  • injury compensation claims made against you
  • property damage compensation claims made against you
  • legal fees associated with injury or damage compensation claims

Compensation claims covered by public liability insurance are those made by members of the public, which can include clients, customers, suppliers and passersby.

For example, if you run a restaurant and a supplier slips on a newly-cleaned floor, or you run a consultancy business and you spill a cup of coffee over a client’s computer equipment, you could face a compensation claim.

This means public liability insurance is useful for most businesses (as most businesses come into contact with the public), but it’s particularly important for shops, tradespeople and salons. Some client contracts will require you to have a certain level of public liability insurance.


What professional indemnity insurance can cover

Professional indemnity insurance can cover your business for compensation claims made by a client because you’ve made a mistake in your work. The mistakes it covers could include:

  • professional negligence
  • unintentional breaches of copyright or confidentiality
  • loss of documents or data
  • defamation or libel

This means that professional indemnity insurance is mainly useful for businesses that provide a professional service or offer advice. For example, if you accidentally forwarded confidential client information to a third party, or if your architecture firm made a mistake in plans and a building collapsed as a result, you could face a compensation claim.

Professional indemnity insurance is a requirment of some membership bodies and regulators - if you’re a self-employed solicitor, financial adviser, accountant, or architect, for example.


Professional indemnity and public liability cover limits

The cover limits of public liability vs. professional indemnity insurance tend to be a bit different too. You can usually buy professional indemnity insurance with a cover limit of between £50,000 and £5 million, while public liability insurance policies are usually between £1 million and £10 million.


Buying professional indemnity and public liability insurance

You can buy professional indemnity insurance and public liability insurance in a single business insurance policy from Simply Business, and add other business insurance covers too.

Alternatively, you can buy a standalone public liability insurance policy. And some businesses - including accountants, consultants, engineers, journalists and surveyors - can buy standalone professional indemnity insurance policies. If you’re not sure whether your business can get a standalone professional indemnity policy, run through our quote form or give us a call on 0333 014 6683.


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