Public indemnity insurance: what you probably mean

There is no standard policy called public indemnity insurance. People who search for it usually mean public liability insurance, which covers claims from members of the public for injury or damage to their property, or professional indemnity insurance, which covers claims that your advice or work caused a client a financial loss. Many businesses need both, and the quickest way to tell is to ask who could claim against you and what they would say went wrong.

Why do people say public indemnity insurance?

The name joins two real covers together. “Public” comes from public liability insurance and “indemnity” comes from professional indemnity insurance. Both are liability policies, both protect you against claims made by other people, and both are often sold to the same kinds of business, so the names blur together. A client contract or a tender form that asks for “public and professional indemnity” adds to the confusion.

The word indemnity simply means being put back in the position you were in before a loss. Most liability policies indemnify you against the cost of a claim, which is why the word turns up in so many policy names. If you want the background, our page on what indemnity insurance is explains the term.

What does public liability insurance cover?

The government’s business support service describes public liability insurance as protection against claims that a member of the public was injured, or their property was damaged, because of your business activities. It says almost all businesses need this type of cover, particularly if you work with the public, visit clients or have clients visit you, or if a venue or client requires it in a contract.

Charity Commission guidance describes the same cover as protection against claims from members of the public for bodily injury or illness, or loss of or damage to material property. Examples would be a customer tripping over a cable in your shop, or a tradesperson damaging a client’s floor while working in their home. Our guide to what public liability insurance is goes into more detail.

Public liability insurance is not a legal requirement for most businesses. Companies House makes the point that employers’ liability insurance is the only policy a small business is legally required to have, and that public liability is often asked for by clients or suppliers instead. You can read more on whether public liability insurance is compulsory.

What does professional indemnity insurance cover?

The Financial Conduct Authority describes professional indemnity insurance as liability insurance that covers firms when a third party claims to have suffered a loss, usually because of professional negligence. The government’s business support service puts it as protection against claims that your advice, work or services caused a client financial loss.

So the claim is about money, not a broken leg or a damaged wall. A client might say your design was wrong, your figures were inaccurate, your advice was poor or you missed a deadline, and that they lost money as a result. See what professional indemnity insurance covers for the detail.

Some professionals must hold it. The FCA requires certain regulated firms to hold professional indemnity cover, and ICAEW says it is compulsory for all of its members who hold a practising certificate and are engaged in public practice. ICAEW also explains that this kind of cover works on a claims made basis: the policy that responds is the one in force when the claim is first made or the circumstances are first notified, which is why it needs to stay in force without a gap.

How do you tell which one you need?

Ask two questions about your work.

• Could a member of the public, a customer or a client be physically hurt, or could their property be damaged, because of something you or your staff do? If yes, you need public liability cover.
• Do clients rely on your advice, designs, calculations, reports or professional services, so that a mistake could cost them money? If yes, you need professional indemnity cover.

If you answered yes to both, you probably need both. An architect visiting a building site, an IT consultant installing equipment at a client’s office, or a bookkeeper who sees clients at their own premises can all face either kind of claim.

Question	Public liability	Professional indemnity
Who usually claims?	Members of the public, customers, clients and other businesses	Clients and others who relied on your work
What went wrong?	Injury, illness or damage to property	Financial loss from your advice, work or services
Required by law?	Not for most businesses	Not generally, but required by some regulators and professional bodies
Who often asks for it?	Clients, venues and suppliers	Clients, regulators and professional bodies
Covers your own employees?	No, that is employers’ liability	No, that is employers’ liability

Why do many businesses need both?

The two covers deal with different kinds of harm, so one does not fill the gap left by the other. A public liability policy is built around injury and property damage. A professional indemnity policy is built around financial loss caused by your professional work. A claim that falls between the two depends on the wording of each policy, which is why it is worth having both written to suit your business.

Contracts often ask for both as well. The government’s business support service lists contract requirements as a reason to buy public liability insurance, and a regulator or industry requirement as a reason to buy professional indemnity insurance. Our page on professional indemnity vs public liability compares the two in more depth.

Example. Priya runs a small surveying practice. While measuring up a client’s house, she knocks over a ladder that cracks a glass door. That is a property damage claim, so it would fall under public liability. Six months later the same client says her report missed a structural problem and they paid too much for the house. That is a financial loss claim about her professional work, so it would fall under professional indemnity. One policy on its own would leave her exposed to the other claim.

What if you employ people?

Neither public liability nor professional indemnity covers claims from your own staff. If you employ anyone, the law usually requires employers’ liability insurance. GOV.UK says you must get it as soon as you become an employer, the cover must be at least £5 million and it must come from an authorised insurer. People often search for this as employee liability insurance or employers’ indemnity insurance, and we explain both terms on their own pages.

What affects the price of each cover?

We do not quote typical prices because they vary so much between businesses. For public liability, the price depends on things such as what you do, where you work, whether you visit clients or have visitors, your turnover and the limit of cover you choose. For professional indemnity, it depends on things such as your profession, the type of work and advice you give, your fee income, the size of the contracts you take on, your claims history and the limit of cover required by your clients or regulator. Higher limits and riskier activities generally cost more.

Frequently asked questions

Is public indemnity insurance a real type of insurance?

Not as a standard product. It is a mix of public liability insurance and professional indemnity insurance. When a contract or client asks for it, check which they actually mean, because it may be one or both.

Is public liability insurance a legal requirement?

For most businesses, no. Companies House says employers’ liability is the only policy a small business is legally required to have. Clients, venues and landlords may still require public liability in a contract.

Do I need professional indemnity insurance if I am self employed?

If clients rely on your advice or professional services, it is worth having whether you are self employed or a company. Some professions must hold it, such as ICAEW members in public practice and certain FCA regulated firms. Our page on when you need professional indemnity insurance covers this.

Can I buy public liability and professional indemnity together?

Yes, many businesses arrange both at the same time, sometimes as separate policies and sometimes within one package. The important thing is that each section has the right limit and wording for your work, so ask us for a quote and we will look for cover that fits.

Who can help me work out which cover I need?

Solar Protect is an FCA authorised insurance broker. Tell us what your business does and who you work for, and we will look for public liability, professional indemnity or both. Call 01795 841 310, Monday to Friday 9am to 5pm.

More on public and employers’ liability insurance. Ready for a price? Ask for a quote or call 01795 841 310.

Sources

• www.business.gov.uk: Insuring your business
• GOV.UK: Charities and insurance
• companieshouse.blog.gov.uk: What insurance does a small business need
• FCA: Professional indemnity insurance
• ICAEW: Pii regulations effective 1 september 2024.ashx
• GOV.UK: Employers liability insurance
• HSE: Hse40

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 November 2026. Solar Protect is the trading name of Solar Insurance Services (Medway) Limited, authorised and regulated by the Financial Conduct Authority. This page is general information, not personal advice.