Professional indemnity and public liability insurance cover two different things and most businesses that need one need the other too. Public liability covers injury to a member of the public or damage to their property caused by your business. Professional indemnity covers financial loss a client suffers because of your professional advice, service or work, for example a mistake, a bad recommendation or negligence. One is about physical harm; the other is about economic harm from your expertise.
The simple split
If a visitor trips over your equipment and breaks a wrist, that is public liability. If your advice, design or report causes a client to lose money, that is professional indemnity. A shop mostly worries about the first; a consultant mostly worries about the second; a great many businesses can face both.
What does public liability insurance cover?
Claims from third parties, members of the public, clients visiting your premises, people affected by your work, for injury or property damage you are liable for. It covers compensation and the legal costs of defending the claim. It is not legally compulsory in the way employers’ liability is, but many contracts and premises require it.
What does professional indemnity insurance cover?
Claims that your professional work caused a client financial loss: negligence, errors and omissions, bad advice, missed deadlines, breach of professional duty. It covers the compensation and the cost of defending the allegation, which is often the larger figure. For some professions it is mandatory: solicitors, accountants, architects and financial advisers among them, usually set by their regulator.
Do I need both?
Often, yes. A tradesperson who also gives design advice, an IT contractor working on a client site, a consultant who visits offices: each can face a physical-harm claim and a professional-error claim, and the two policies do not overlap. Which you need, and at what limits, depends on your trade, your contracts and your clients’ requirements.
How does this relate to employers’ liability?
Employers’ liability is the third piece and covers your own staff rather than clients or the public. It is legally required for most employers. See our guide to employers’ liability insurance requirements.
Getting the mix right
The value of a broker here is matching the covers and limits to how you actually work and what your contracts demand, rather than buying a box-standard package that leaves a gap. Solar Insurance Services can arrange professional indemnity, public liability and employers’ liability together. Get in touch to talk through your trade.