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Professional Indemnity or Public Liability Insurance: Which One Should I Get?

Aug 08, 2022
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No insurance policy has a one-size-fits-all coverage that works for businesses. Each industry has its unique requirements, not to mention the legal obligations and requirements that companies must comply with to keep operating in Australia.

You might be familiar with both Professional Indemnity and Public Liability insurance, but have you figured out which one best suits your company's needs? Or should you get both for your company?

What is Professional Indemnity Insurance?

You should consider having Professional Indemnity insurance if your business offers professional advice or services in exchange for a fee. This type of insurance will protect you against claims from your clients for damages or losses, including those arising from alleged or actual errors, negligence, or omissions. Moreover, this type of insurance covers other legal expenses you will incur while defending claims. Aside from these benefits, having insurance will establish credibility, which in turn, will earn your clients’ trust. Depending on the type of business you own, you might also be required to have Professional Indemnity Insurance to operate in Australia.

PI insurance may also protect your business from financial losses through:

Claims investigation costs coverage
Contractor coverage
Retroactive coverage
Court-awarded damages coverage
Compensation costs coverage

Professional Indemnity insurance coverage varies from policy to policy. Review your insurance policy to ensure that it protects you from the unique risks your business is exposed to.

What is Public Liability Insurance?

On the flip side, you might want to consider having Public Liability insurance, which protects you against third-party claims arising from injuries or property damage you have caused others. This form of protection covers accidents that took place inside or outside your company premises. Like other insurance types, this is a requirement for some businesses and industries in Australia.

Public Liability may also protect your business through:

Lawyer and consultant fees coverage
Court-awarded damages coverage
Compensation costs coverage
Third party's legal costs and fees coverage

Management Liability Insurance

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

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Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

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Business Package

Purchase up to six products under one Business Insurance Package.

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Lawyer and consultant fees coverage
Court-awarded damages coverage
Compensation costs coverage
Third party's legal costs and fees coverage

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Public Liability insurance can safeguard your business in multiple ways. Make sure your policy covers all your identified needs.

Which one should I get?

Professional Indemnity and Public Liability insurance might have overlapping coverages, but they both serve specific purposes for different business needs. While businesses in various industries may find one more suitable for their company than the other, it is beneficial to have both. The two insurance types complement each other, and having both provides robust insurance coverage that will protect not only your company but also your clients.

Insurance planning can be tricky, and running a business is a challenge in itself, but don't let these get in the way. Talk to an insurance broker today, and get a better understanding of your insurance needs and requirements.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

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