Both public liability insurance and professional indemnity insurance provide cover for your legal liability to meet claims made against you or your business, though the nature of these claims differ. In comparison to professional indemnity insurance, public liability covers claims made for injury, illness, or damage while professional indemnity covers claims made by clients for professional errors. If something does go wrong while doing business, having public liability and professional indemnity insurance will give you peace of mind.
How does public liability insurance work?
You need public liability insurance if a third party takes a legal action against your business for injury, illness, or property damage. This may include customers, clients, suppliers, or passersby.
For instance, if you work in construction and someone slips and falls on a wet floor on your premises, you may have a public liability claim. Legal defence, compensation payments, medical costs, and lost income can also be covered by your public liability insurance.
How does professional indemnity insurance work?
The purpose of professional indemnity insurance is to protect you against claims brought by clients due to professional negligence or errors in your work. These can include poor business advice, professional errors, defamation and libel, and substandard work. Besides covering legal defence costs, compensation payments, and additional expenses for rectifying an issue, professional indemnity insurance can also cover loss of income as a result of the claim.
Unlike public liability insurance, which covers risks such as injury and property damage, professional indemnity covers errors and negligence in the workplace.
Are they a legal requirement?
There is no legal requirement in the UK for public liability and professional indemnity insurance. Employers’ liability insurance is the only type of insurance that businesses are legally required to have. This is relevant for any business that has one or more employees.
Do I need public liability and professional indemnity insurance?
Both professional indemnity and public liability can be considered valuable for different reasons. Even though neither is a legal requirement, public liability and/or professional indemnity insurance can offer you the assurance that if a claim arises, you will be protected. You could be left with the full financial burden of legal proceedings and compensation payments if you do not have adequate insurance.
Whether your business works directly with the public or interacts regularly with clients and suppliers, public liability may be a good way to protect your business in the event of an accident.
In contrast, professional indemnity insurance covers claims relating to all types of professional mistakes or negligence, so it could prove valuable in any industry.
Now that you know whether you need professional indemnity or public liability insurance, you’re in a better position to decide. For more information regarding public liability insurance or professional indemnity insurance policy please don’t hesitate to get in touch with our team!