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What is the difference between Professional Indemnity vs Public Liability Insurance?

I would love a dollar for every time I have been asked, “what is the difference between Public Liability & professional indemnity insurance”?

Put simply, Professional Indemnity insurance in Australia (also known as PI Insurance) covers losses arising from you providing professional services or advice to a client. If you are asking yourself ‘what constitutes a professional services’ then watch our first video – How do you figure out who needs Professional Indemnity Insurance?

You see, when your work is skilled and you require a period of academic training, your clients consider you to be an expert.

Furthermore, your customers rely upon your professional expertise. In fact, unprofessional advice, failure to exercise required skill or breach of a professional duty can all trigger a claim. Typically, these types of PI claims arise from the provision of professional services tied back to advice or design.

Put simply, Professional Indemnity Insurance (also known as PI Insurance) covers losses arising from you providing professional services or advice to a client.

Simon Pascoe

On the other hand, the trigger for a claim under Public Liability insurance is different. Quite simply, the trigger for a claim is a demand for compensation as a result of personal injury or property damage.

At this point, it’s worth noting that Public Liability Insurance policies extend to include Products Liability. Regardless, the trigger for a claim under both Public & Products Liability is still limited to injury or damage. Importantly, Public & Product Liability policies have a standard exclusion for pure financial loss claims where no property damage or personal injury has occurred.

Additionally, Public & Product Liability Insurance policies have a Professional Indemnity Exclusion. Similarly, Professional Indemnity policies often have an exclusion for personal injury or property damage claims, unless resulting out of a breach of a professional duty.

If I Purchase Professional Indemnity Insurance, do I need Public Liability?

Many people also ask, “if I buy Professional Indemnity Insurance, do I need Public Liability Insurance”? The short answer is, yes. If you operate a business, you can be liable for damages or injuries to another person or property. Don’t just take our word for it, this is highlighted in the Australian Government’s Business website. In fact, this liability exists whether you are a professional or not.

To Summarise

In summary, what is covered under Public Liability policy is excluded under Professional Indemnity and vice versa. That’s why it’s important to have both. The good news for professionals is cost. Public Liability is generally much cheaper than the cost of PI Insurance. Better still, if you purchase Public Liability with the same company that handles your PI insurance, they generally offer a discount.

Go to FD Beck’s professional indemnity insurance calculator to get quote. Better still, FD Beck’s online quick quote includes Public & Product Liability options for both $10,000,000 and $20,000,000. Answer a few simple questions to generate your online quote. Almost 150 professional occupations are covered.

For over 100 years, FD Beck has protected Australians. Rest assured, we have the knowledge and expertise to handle every aspect of your insurance needs.