What is the difference between professional indemnity insurance and public liability insurance?

The main difference between professional indemnity insurance and public liability insurance is type of situation you're covered for.

Professional indemnity

Professional indemnity covers your clients for financial losses suffered as a result of the negligent services or advice you’ve provided.

Here are a few claims scenarios where Professional Indemnity can help:

  • A business consultant who accidentally reveals sensitive client information by forwarding an email to the wrong person
  • An IT consultant who specifies the wrong network cabling, leading to extra costs for the client
  • A graphic designer who uses legally protected intellectual property (like stock photography) without permission

Professional indemnity policies have cover levels ranging from £2 million to £5 million cover depending on your occupation.

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professional indemnity

Public liability

Public liability insurance protects you if someone makes a claim against you because they were accidentally injured, or their property was damaged.

Here are a few claims scenarios where Public Liability can help:

  • A builder who is working on a roof and drops tools from a height, damaging a customer's car and leading to a claim
  • A beautician doesn't check their wax's temperature and accidentally burns a customer, leading to a claim 
  • A cleaner whose cleaning a house when their customer slips on the wet stairs they've just cleaned, leading to a claim

Public liability policies have cover levels ranging from £1 million to £5 million depending on the needs of your business.

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public liability

Are the cover limits for Professional Indemnity Insurance and Public Liability Insurance the same?

No, the cover levels for professional indemnity insurance and public liability insurance are not the same. With AXA, you choose the level of cover your want for your policy depending on how much cover you think you’ll need.

For professional indemnity insurance, cover levels start at £100,000 and increase up to £5 million. For public liability, cover levels start at £1 million and range up to 5 million.

For both products, how much cover you’ll need will depend on a few factors, such as:

  • The size of your business
  • The type of business you have
  • Your claims history
  • Risk appetite and business activities
  • Contractual obligations

Do I need both professional indemnity and public liabilty?

Whether or not you need both professional indemnity and public liability insurance will entirely depend on your business and the type of work you do.

If you interact with anybody who isn’t an employee or a member or your business then you should consider getting public liability insurance. Only businesses that provide professional services, designs, or advice to clients for a fee or as part of a contract will also need professional indemnity insurance.

Which occupations might require both types of cover?

Most occupations in the professional services family may required both types of cover, given their interactions with the public and clients, and the types of services offered. Certain occupations are more likely to have both covers than others. These occupations include:

  • Accountants and financial advisers
  • Architects and engineers
  • Business consultants
  • Creative, designers and entertainers
  • IT Consultants (such as web designers, graphic designers, and PR consultants)
  • Property managers and surveyors
  • Bookkeepers

Is either cover a legal requirement?

Neither professional indemnity insurance or public liability insurance are a legal requirement for business.

However, both of these covers provide invaluable protection for businesses in the event that someone makes a claim against them.

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