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Professional Indemnity vs. Public Liability: Understanding the Core Differences
Professional Indemnity and Public Liability are two of the most commonly requested forms of business insurance, yet they protect against very different types of risk.
Simplified Comparison
Core Difference
Public Liability responds to injury or physical damage caused by your business activities. Professional Indemnity responds to financial loss caused by your advice, design, specification, service, or professional judgement.
Claim Trigger Example
An IT consultant may require both Public Liability and Professional Indemnity, but each policy responds to a different type of event.
You remotely deploy a software update that deletes or corrupts the client’s customer database, halting their trading operations for three days. The loss arises from a technology error, failed implementation, or defective professional service. Professional Indemnity, or Technology E&O, would usually be the relevant policy.
You visit a client’s office and accidentally knock a cup of coffee onto a high-end server rack, physically damaging the hardware. The loss arises from an accident during your physical presence at the client’s premises.Public Liability would therefore be the relevant policy.
Contractual Requirements
Contracts, MSA’s, public sector tenders, and procurement teams frequently specify minimum limits for both Professional Indemnity and Public Liability.
For example, a client may require:
- £5 million Public Liability
- £2 million Professional Indemnity
- £2 million Cyber Insurance
- £10 million Employers’ Liability
