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

There are so many different sorts of commercial insurance policies available for your business that it can be difficult to decide what you need.

A business insurance broker can help you.

One sort of insurance is public liability.  Another is professional indemnity.  But what is the difference between public liability and professional indemnity insurance?

A standard public liability policy covers your business in the event that it is sued for accidental loss, damage or injury to a member of the public or a customer or for damage to their property. For a claim to be made there has to be evidence of a physical loss of some sort. Payment of a claim is not typically made to the insured, but rather to a third party suffering loss and would generally include settlement and defence costs, within policy limits.

In the case of professional indemnity, on the other hand, the cover provided is for legal responsibility for financial loss that a customer may suffer as a result of advice or a service your business has provided for a fee. There does not have to be evidence of physical loss or damage. Again payment would usually be made to a third party. So if your business offers a professional service to other businesses, or gives advice, then professional indemnity insurance will cover you if you are negligent or make a mistake which causes your customer to suffer financial loss.

 

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