Insurance, Liability & Indemnity

Public Liability and Professional Indemnity Insurance: What’s The Difference?

Business Advice | 6 April 2023 | 1 year ago

There are a lot of insurance options out there for a business; some you will need, and some won’t be relevant to your business type or industry. For a lot of business owners, public liability and professional indemnity insurance are two that crop up the most, but the differences are not always clear. Some business owners become confused between these two different forms of insurance, as they both relate to a business’s responsibilities to the public but in a slightly different way. In this blog, we take a look at liability vs. indemnity insurance, and determine which is best for your business.

What is Public Liability Insurance?

Public liability insurance covers you if a third party suffers damage or injury relating to your business practice. For example, if a third party takes you to court after an accident that happened at your business, public liability insurance will help to cover the costs. This includes the legal fees, compensation and any other costs related to the case. There are a variety of reasons why you might use your public liability insurance, such as if someone claims personal injury or death, or even damage to their personal property. Public liability insurance only covers third parties, and it does not cover you or any of your employees.

What is Professional Indemnity Insurance?

Whereas public liability insurance covers you for third party injury and damage, professional indemnity insurance covers you if someone claims a service that you provided was inadequate.

It covers legal claims made in relation to negligence or errors on the part of your business, and professionals that it employs. For example, if someone makes a claim against you for providing a substandard quality of work, professional indemnity insurance will help with the costs. A lot of scenarios are covered by professional indemnity insurance including if someone accuses you of making a mistake in a professional capacity that cost them money.

What Insurance Do I Need For My Business?

You might need professional indemnity insurance or public liability insurance, or you might need both. It depends on the type of business that you have and the services that you provide. If you don’t provide a professional service, you are unlikely to have a claim brought against you for providing a negligent service, and so professional indemnity insurance might not be needed. Similarly, if you provide online services and don’t have a physical business, it’s unlikely that a third party will suffer damage or injury as a result of an accident.

 

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