There are numerous types of insurance coverage every business must have in order to protect itself from added expenses. People get confused about two common ones: public liability and professional indemnity insurance.
How are they different, and do businesses need one or both? Keep reading to find out.
As the name suggests, public liability insurance is designed to protect your business from any third-party harm that may occur while they are on your premises. It can cover you against claims of negligence or personal injury caused by you or any of your workers.
A public liability insurance policy is mainly needed when:
- You offer goods and services to the public
- You're a landlord, and your tenants are using your property as their place of business
- You are the owner of a public venue such as a hotel, shopping centre, amusement park or a sports stadium
- You provide a hazardous service (such as a pest control business)
- You're working in the health or social services sector
Some instances when a public liability insurance policy comes to play include:
- Damage to the property of the customer while they are at your business premises
- A person is injured at an event you organised
- A customer slips or trips due to a hazard on the floor of your business premises
Professional indemnity insurance is a form of insurance offered to people in certain professions —such as solicitors, accountants, contractors, and so on—and aims to protect them against mistakes made while working. If, for example, a solicitor makes a mistake while working on a case, their professional indemnity insurance will cover the costs of any damages incurred by the client.
While public liability insurance is designed to protect your customers, professional indemnity insurance protects you as a professional. You need professional indemnity insurance if:
- Your profession is regulated by law (e.g. lawyers, accountants, or a business adviser)
- You operate a business that involves special equipment or vehicles (e.g. a photographer or architect)
- You offer professional services to customers
- You are a tradesperson or subcontractor
Some instances when a professional indemnity insurance policy comes to play include:
- Providing negligent legal advice
- Losing the documentation provided by clients
- Failing to fulfil your side of the contract due to negligence
- Acting fraudulently and harming the client
- Unintentionally breaching confidentiality and copyright agreements
- Giving bad advice that leads to a client's financial loss
- Making mistakes, errors or omissions in the service you provide
While it is easy to confuse public liability and professional indemnity insurance, the two have different purposes and target other groups of people.
Public liability insurance can cover you against claims of negligence or personal injury caused by you or any of your workers or due to poor workmanship, filed by customers, passers-by or suppliers. On the other hand, professional indemnity insurance covers you against your mistakes while working in your professional capacity.
Final Thoughts
Professional indemnity and public liability insurance can play essential roles in protecting any business from lawsuits. If you're not sure which type of insurance coverage is right for you, it is best to speak to an insurance agent and ask them to help you choose the best policy for your business.
For public liability insurance and professional indemnity insurance in Sydney, don’t hesitate to call us at Ensura. Here at Ensura, our experts will help you find the best policy that will protect your business from all kinds of risks without breaking the bank. Message us today for a free quote.
Disclaimer: As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy document. The information contained on this webpage is general only and should not be relied upon as advice. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific insurance product. It is only intended to provide education about the financial and insurance industry. The views reflected in the commentary are subject to change at any time without notice.
