What’s the difference between Public Liability and Professional Indemnity insurance?

The difference between Public Liability and Professional Indemnity insurance is one of our most common enquiries, and it is important for all businesses to understand the distinction between these insurance policies.

Public Liability Insurance

Public Liability covers claims against you for bodily injury and damages to property that arises from an occurrence in connection with your business activities. For example, if a person is injured on your premises, or if you damage property while visiting a client… this would be public liability claim.

Product Liability is a common extension of Public Liability insurance that stretches the cover to include bodily injury or property damage arising out of the use of your products.

The policy is “triggered” by the nature of the claim defined in the insuring clauses specifically for personal injury or property damage. Public Liability (and Product Liability) insurance packages generally don’t cover for claims of financial loss that don’t include property damage or personal injury occurrences.

Professional Indemnity Insurance

Professional Indemnity Insurance covers claims that arise from a breach of the duty you owe as a professional or expert for services such as:

  • advice
  • design
  • consultancy
  • analysis services

If you are a Professional in your field, it is reasonable that your clients are able to rely upon your professional expertise… presenting you with a professional duty of care to make sure any advice you provide is accurate and complete. Professional Indemnity insurance covers any mistakes or omissions you may make in providing this expert advice.

Unlike Public Liability, Professional Indemnity claim types are generally not defined in the insuring clauses of the policy, and can therefore include personal injury, property damage or financial loss arising out of your professional service.

Overlap Between Public Liability & Professional Indemnity

Overlaps in cover with public liability and professional indemnity are generally addressed by the way of policy exclusions, in order to remove duplications. For example, Public Liability policies would usually have some form of professional services exclusion, and Professional Indemnity policies can have exclusions related to bodily injury or property damage (unless arising out of breach of professional duty).

The danger with these exclusions is leaving potentially devastating uninsured gaps in your policy as a result of trying to avoid overlaps between policy coverage. For example in the ICT business field, whether the activity constitutes a Product or a Professional Service is a grey area in law and maybe excluded under both types of policy because of this grey area.

Public Liability & Professional Indemnity Adelaide

Given the complexity of these two covers, the basis upon which they are issued, and the overlaps that can occur between them… the right advice together with a properly constructed policy from an experienced insurance broker such as Donnellys is critical.

With over 40 years experience providing professional advice and services to business enterprises looking to purchase insurance, Donnellys understand the needs of Adelaide businesses.

For further information or enquiries about Public Liability or Professional Indemnity insurance Adelaide, contact Donnellys today.