Public liability vs. professional indemnity

What's the difference between public liability and professional indemnity insurance?

Public liability and professional indemnity both cover compensation claims.

The difference between public liability and professional indemnity insurance is that public liability covers claims made by members of the public for accidental injury or property damage caused by you or your employees. Professional indemnity, however, covers claims made by clients for mistakes or negligence in your work.

What does public liability insurance cover?

Public liability insurance provides cover for legal and compensation costs relating to any claim made against your business due to injury or property damage inflicted on a non-employee.

If your business causes an injury or property damage to a member of the public – that includes clients, suppliers, contractors or anybody else not employed by you – PL will cover you for the resulting legal and compensation costs.

An example of a public liability claim would be: a client slips on a wet floor in your office and wants to claim compensation.

What does professional indemnity insurance cover?

Professional indemnity insurance covers claims where a third party, such as a client, sues you in relation to advice, consultancy or a professional service that you provided which has caused them to lose money. With this in mind, professional indemnity is most relevant for contractors, freelancers and any business that works on a contractual basis.

With professional indemnity, you’ll be covered for libel, copyright/ trademark infringement, erroneous advice, defamation, plagiarism, wrong allegations, negligent content, disputes involving contracts or IP and product disparagement. It will cover the legal costs and expenses to defend you as well as compensation awards if the claim is successful.

A professional indemnity insurance claim example could be: a client loses money because of a mistake you made on a report that you were hired to create or a client suffers business downtime as a result of your negligence and holds you financially liable.

Do I need both public liability and professional indemnity?

Public liability insurance isn't a legal requirement in the UK. However, this doesn't mean businesses don't need it. Without adequate cover, the unexpected legal and compensation costs associated with a claim (e.g. someone suing your business for injury or property damage), could bankrupt a business.

Similarly, professional indemnity insurance isn't a legal requirement in the UK, but if you work with clients on a consultancy or design basis, they will most likely require it of you in order for you to work with them.

To learn more, find out if your business needs public liability cover or whether you need professional indemnity cover.

Can I buy public liability and professional indemnity together?

Yes, if you find you need both public liability and professional indemnity insurance, you can buy both covers together under one policy. Simply click ‘Start your quote’, select your industry and follow the steps to add the level of cover you need.

Find more information

Our insurance 101 guides break down what each type of cover is, what they cover and the types of businesses that may need them in more detail.