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  • Writer's pictureAmanda Bird

The Difference Between Public Liability & Professional Indemnity

Insurance can help safeguard your business, but what insurance do you actually need?

There is a learning curve when you start a new business, and working as a professional is no exception. Purchasing insurance is one area where small business owners frequently become overwhelmed.

As a professional, you're surely aware that insurance protects your company. However, it may be less evident what forms of company insurance you may require or what each policy covers.

Professional Indemnity and Public Liability are two types of insurance coverage that many professionals consider. Each safeguards your company in a unique and crucial way. Learn the crucial differences by reading below!

What is Public Liability Insurance?

Public liability insurance can protect your company from:

  • Property damage compensation claims made against you

  • legal expenses linked with injury or damage compensation claims

  • Compensation claims made by members of the public, which might include clients, customers, suppliers, and bystanders, are covered by public liability insurance.

For example, if you own a restaurant and a supplier slips on a newly washed floor, or if you own a consulting firm and spill a cup of coffee on a client's computer equipment, you may face a compensation claim.

As a result, while public liability insurance is helpful for most businesses (since most firms come into touch with the public), it is especially necessary for stores, craftsmen, and salons. Some client contracts will need that you carry a particular amount of public liability insurance.

What is Professional Indemnity insurance?

Professional indemnity insurance can protect your company from compensation claims filed by a customer due to a mistake in your work. It may encompass the following errors:

  • professional errors

  • unintended infringements of intellectual property or breaches of confidentiality

  • Document or data loss, slander or libel

As a result, professional indemnity insurance is primarily appropriate for organisations providing professional service or advice. For example, if you inadvertently sent private customer information to a third party, or if your design business made a plan error and a building fell. As a result, you may face a compensation claim.

Some membership organisations and regulators require professional indemnity insurance, such as if you are a self-employed solicitor, financial adviser, accountant, or architect.

Which One Does Your Business Need?

Now that you know what each type of business insurance protects against, the next step is to ensure you have the correct insurance.

You'll need professional indemnity insurance if you provide a professional service, such as accounting, legal services, or architecture. If you sell on behalf of third parties, such as at a market stall or work on a customer's site and could injure a third party, such as in construction, you'll need public liability insurance.

Taking the time to understand the types of business insurance that may be available to you can help protect your business and ensure it is properly protected.


While each business has its own unique circumstances, it's helpful to know about the two most predominant types of insurance that small businesses need to consider.

For some businesses, public liability insurance is essential, because it protects your company from claims made by members of the public. Professional indemnity insurance is essential for other businesses because it protects your business from compensation claims from clients.

Each type of insurance helps protect your business from costly legal issues that may arise.

Find the best insurance policies for your small business assets with the help of New Wave Insurance! Our team of Gold Coast insurance specialists does the heavy lifting for you when it comes to finding the right insurance, negotiating on your behalf to find the best value policies. Book a free 15-minute insurance consultation with us now!

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