Public liability vs professional indemnity insurance: what’s the difference

For example:

• A customer suffers food poisoning from something they ate in your restaurant or pub
• You forget to put up ‘wet floor’ signs and a customer slips and injures themselves
• A client trips and falls on a raised flagstone while visiting your business premises
• You accidentally spill hot coffee over a client’s brand-new laptop during a business meeting

How does professional indemnity insurance work?

Professional indemnity can cover for claims made against your business for professional negligence or mistakes you’ve made which causes a customer or client to lose money or damages their reputation.

For example:

• A tax consultant fails to tell clients about tax relief available
• An employee leaves documents containing sensitive client information on a train
• A solicitor offers the wrong legal advice
• A project is delayed causing a client’s budget to overrun
• A marketing company implements a bad business strategy causing a client to lose valuable business

Can I take out both?

Absolutely. If your business offers a service based on your skills, knowledge and expertise, and also has a premises where members of the public visit, both types of insurance can provide total peace of mind that your business is protected.

Let’s say you’re an accountant who works from home with clients who visit you for meetings and appointments. Professional indemnity can cover your business for claims against professional negligence while public liability can protect your business if an accident occurs on your property and injures a client. 

Is business insurance the same as public liability?

The term business insurance is a general term used to cover a whole range of risks specific to your business.

Public liability is a type of business insurance, as is professional indemnity. But they’re not the only ones. For example, if you employ staff, you’ll need to take out employers’ liability insurance. Unlike other types of business insurance, this is a legal requirement, even if you only employ one person.

You can buy public liability and professional indemnity cover as separate policies or combine them into a single business insurance package with other types of cover you might need.

Depending on the type of business you run, a business insurance package might include:

• Product liability if someone is injured or their property damaged by a faulty product you sold them
• Commercial buildings insurance covers damage to the property if you own the building where your business is located
• Business contents insurance covers business essentials such as equipment, furniture and, in some cases, stock
• Business interruption insurance covers loss of income if your business has to close for a period of time due to something like your premises being flooded. However, this type of insurance won’t typically cover for pandemics. Make sure you fully understand what interruptions your business will be covered for before signing up for a policy.

The list could go on, but whatever your trade or profession, you can find an insurance package that’s tailored to the specific needs of your business.

Find out more about the different types of business insurance you might need.