What is the Difference Between Public Liability and Professional Indemnity Insurance?

What is the difference between public liability and professional indemnity insurance? We define PL and PI insurance to help you decide if your business needs them.

What is public liability (PL) insurance?

Public liability insurance covers you against material damage (i.e. product, equipment, property, etc.) and injury claims that result from negligence on behalf of you or one of your employees. If a third party experiences property damage, bodily injury, or is killed while completing your work, PL insurance can help you cover the cost of the claim as well as court and legal fees (depending on the terms of your policy). That's why it is often referred to as third-party insurance. 

Examples of when you need public liability insurance

  • You accidentally cause property damage while working, such as damaging a pipe while installing flooring, resulting in flooding and significant property damage.
  • Disrepair as a result of defective workmanship becomes evident during or after work completion, such as a skylight pane crashing to the ground during installation and injuring a visitor.
  • Your work results in slips or trips, such as spills that aren't cleaned up or that don't have proper warning signs placed, that then lead to customer injury.

Do I need professional indemnity and public liability insurance?

Public liability insurance is especially important for businesses that work with physical products or directly interact with the public, such as tradesmen and manufacturing companies. That said, many businesses will not work with you unless you can show them proof of public liability insurance, making it a valuable asset for most businesses. Those who manufacture products or sell food should also consider products liability insurance which covers businesses against damage caused to their customers or their property by defective or dangerous products.

Professional indemnity insurance is essential for businesses such as professional consultants, architects, lawyers, accountants, digital agencies, software developers, business analysts, and marketing companies. However, even tradesmen will want Professional Indemnity Insurance to cover accidental loss of sensitive documentation, information leaks and the risk of giving poor advice.

For more information please visit our guide to professional liability insurance or visit our page on trade specific insurance advice. If you have any questions, we're happy to help.

This is a marketing article by Towergate Insurance.

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