Insuring your business
Public Liability vs Professional Indemnity Insurance
3 December 2018
There are a lot of different insurance options on the market for businesses, and knowing which cover is right for your business can be tricky. However, if you’re a business owner or are responsible for overseeing the risk management of a business, being caught without the right type of insurance can prove costly, regardless of whether your business is big or small. While both Public Liability and Professional Indemnity Insurance are designed to safeguard businesses against claims and accidents of third parties, on closer inspection, they are also designed to offer different forms of protection for a business’ activities. We compare the difference between Public Liability and Professional Indemnity Insurance and explain where they meet and end.
Public Liability Insurance
If you have members of the public visiting your business’ premises, regardless of whether they’re customers or not, their safety is your responsibility once they step foot inside. In the same way, if you’ve sent employees to visit a customer’s premises, such as an electrician, your business also has a responsibility to the premises you or your employees are visiting. More often than not, Public Liability Insurance can cover your legal liability to pay compensation for injury or damage to property, caused to a third party in connection to your business.
It’s an important consideration for every business, especially if it involves activities with the public and other businesses. Knowing what you’re covered for when taking out Public Liability Insurance is crucial because not all of your business’ activities may be covered. Explore Public Liability Insurance with GIO and know what’s covered.
Professional Indemnity Insurance
Professional Indemnity Insurance can provide cover in the event of a breach of contract, or a mistake from professional services provided, such as a mistake made in the course of providing professional services or advice, or recommendations to a client. It can also cover against liability for breach of professional duty when providing a service for a fee. For example, if a client disputes work you have undertaken for them – perhaps it could be financial advice given by an accountant leading to the customer suffering financial loss – Professional Indemnity Insurance can cover the cost of defending the claim. It can also cover any compensation or damages awarded, up to the limit of your cover. Professional Indemnity commonly provides cover for professionals in various industries, including legal professionals, medical practitioners, engineers and consultants.
Where do they cross over?
In many instances, both Public Liability and Professional Indemnity Insurance are differentiated by way of policy exclusions. For example, Public Liability might have exclusions around professional services, and Professional Indemnity policies can have exclusions related to bodily injury or some property damage (when out of breach of professional duty). The risk with these exclusions is leaving any uninsured gaps in your policy as a result of avoiding any overlaps between policy coverage. Given the complexity of these covers, the basis upon which they are used, and the crossovers that may occur between them – it’s worth seeking the right advice from your insurer to ensure that you’re getting the best cover possible for your business.
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Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Consider the Product Disclosure Statement before making a decision about this insurance. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.