They are two of the most common types of business insurance, but do you really know what they are protecting you from? Let’s take a look at these two different forms of cover and how they can protect your business.
What is Public Liability insurance*?
Public Liability Insurance is designed to provide protection for you and your business in the event a customer, supplier or a member of the public are injured or sustain property damage as a result of your negligent business activities.
If your business interacts with third-parties in any capacity then this is an important form of cover to consider.
What is Professional Indemnity insurance*?
Professional Indemnity protects you against losses claimed by a third–party due to alleged or actual negligence or errors in your professional services or advice. Your Professional Indemnity insurance will meet the associated compensation payable to a third –party together with your defence costs (which can include legal costs, investigator costs and expert fees).
Do I need Public Liability insurance?
These are some examples of when a small business needs to consider protecting their business with Public Liability insurance.
- Occupations such as Consultants/Contractors/ Tradespeople
- Businesses that have clients visiting their home or out and about meeting clients
- Businesses that have an office, showroom, shop or any premises
- Any kind of business that interacts with customers or the public
Recommended reading: Do I need Public Liability Insurance?
Do I need Professional Indemnity insurance?
Professional Indemnity insurance is an important form of cover to consider for:
- Anyone who provides professional advice or services to a business or individual
- Contractors looking to work for the government and many organisations required to have cover to be awarded a contract
Some of the typical types of professions that take out Professional Indemnity insurance include: Health Professions, IT Contractors, Management Consultants, Accountants, Estate Agents etc. For some professions holding professional indemnity insurance is a pre requisite for registration and/or association membership.
Recommended reading: Do I need Professional Indemnity Insurance?
Public Liability insurance: what is typically covered and excluded?
Public Liability insurance provides compensation for:
- personal injury suffered by a third–party (e.g. a customer, supplier or member of the public)
- damage to property owned by a third–party due to your negligent business activities
- legal and defence costs associated with a covered claim
Many public liability policies also provide cover for product liability. Product Liability insurance* protects your business against claims by third parties relating to property damage or personal injury allegedly caused by your products.
The following are not typically covered by Public Liability insurance:
- Injuries to your employees
- Damage to your own property
- Costs of rectifying faulty workmanship
- Professional negligence
- Contractual liability
- Events occurring before or after the policy period
Professional Indemnity insurance: what is typically covered and excluded?
Depending on the type of Professional Indemnity insurance you take out, your policy could cover:
- Payment of compensation as a result of a claim, including but not limited to Court awarded damages
- An award of legal costs against you
- Reasonable legal costs incurred in defending or responding to the claim
- Claim investigation costs
- Disciplinary proceeding costs
Professional Indemnity insurance will typically not provide cover for:
- Intentional damage
- Contractual liabilities
- Professional fees
- Known claims and circumstances
- Fraud and dishonesty
Want to know more?
Jump online or give our friendly team at BizCover a call and receive multiple quotes from some of Australia’s leading insurers in minutes. Experience insurance made easy today.
