Rhino Trade Insurance are here to boil down all that nitty, gritty insurance jargon and help you better understand the major differences between Professional Indemnity Insurance and Public Liability Insurance.
Who needs them? What do they cover? How much will a claim cost? These are just some of the common questions tradespeople have about these popular cover options. We’re here to help, so grab a brew, sit back and prepare to be informed.
To understand the difference between the two, let’s break them down individually. First up, Professional Indemnity Insurance.
Professional Indemnity insurance offers protection for individuals or companies that provide a service, designs or advice as part of their professional work. This type of insurance will cover costs incurred if a customer alleges that you provided faulty work, designs or advice and they have suffered a loss as a consequence.
Think about what would happen if some work you did for a customer turned out to be less-than-satisfactory, and instead of resulting in a positive Google review, it actually ends up costing the customer an arm and a leg.
What sort of thing, you ask? Bad advice which leads to a boiler overheating, unintentional plagiarism of a design, data loss or an installation that didn’t comply to building regs and needs to be ripped out and re-done. Any of these things would cost the customer money and are likely to trigger a claim.
Now, we’re not saying you cock up regularly. You pride yourself on offering a 5-star service and bad outcomes aren’t something you associate with your work.
However, trade work can be unpredictable. We all make mistakes, and advice given or work completed in good faith can sometimes come back to bite you. And it can sometimes be the simplest mistake that ends up costing the most.
Defending a civil legal case against your business is expensive, and often small trade enterprises simply can’t afford to come up with the cash to cover it.
A solid Professional Indemnity Insurance policy will ensure you don’t have to dip into your own hard-earned money to settle these claims – your insurer will pay out on your behalf up to your chosen limit of indemnity.
Claims made against your business can cost thousands, and in some cases, millions. It’s impossible to predict, so the safest bet is to get covered for any eventuality.
Professional indemnity insurance will pay out to cover the following costs of a claim:
As you can imagine, these costs can be sky-high.
Professional Indemnity Insurance is one of the best policies you can have in place to protect yourself as a small trades business. Not having it in place is costing tradespeople like you a small fortune in out-of-pocket expenses brought about by customer claims.
You might be wondering what is actually covered under this type of policy.
We’ve searched our back catalogue of Professional Indemnity claims and below are some examples.
The angry neighbour
A builder is working on a driveway redesign, during which he offers advice as to where the boundary should finish. The completed drive ends up infringing onto the neighbour’s land by six inches. The neighbour demands the drive is reduced in size to give him his boundary back, and makes a claim against the builder’s business for the costs. The builder can then claim these costs under their Professional Indemnity Insurance.
The copycat
Whilst setting up a brand-new business, a tradesperson closely replicates another brand’s logo, style, designs, as well as part of their business model and website. When the competitor finds out and gathers enough evidence, they lodge a claim and sue. The tradesperson is able to defend themselves in court and pay any eventual settlement costs out of their Professional Indemnity cover.
The sparky
An electrician is working on a contract to install emergency lighting in a school building after confirming his plan is fully compliant. After the installation is complete, they find out the system doesn’t comply with the relevant building regulations. The lighting needs to be removed and new lighting re-installed that is compliant. The school claims back the cost of this work from the electrician, who then claims it on his Professional Indemnity Insurance.
The faulty heating system
An engineer designed a heating system that kept cutting out. The customer looked into it and found the system was faulty due to a design error that required rectification. The customer made a claim against the engineer for the rectification costs, which ended up in court. The decision was upheld in court and there were significant rectification costs. The engineer didn’t have to pay – his Professional Indemnity Insurance provider did.
The generator
An electrical contractor designed and installed a back-up generator in a shop. The generator failed one night during a power cut, causing damage to frozen foods and impacting the shop’s ability to trade. The shop made a claim for several days’ worth of lost trade and a new back-up power system, which the contractor was found liable for. Luckily, he had Professional Indemnity Insurance, so he didn’t pay out of his own pocket.
Rhino, the trade insurance experts, offer industry-leading Professional Indemnity cover. Our limits of indemnity go up to £2m, and our premiums are some of the lowest around.
Rhino offers annual or monthly payment options with no interest fees or extra admin fees for paying the way that suits you. We also offer same-day cover with documents sent immediately and UK-based telephone support 6 days a week.
Of course, we’re biased, but you can ask our thousands of happy trade insurance customers who renew their policies with us year after year – you simply won’t find Professional Indemnity Insurance this good anywhere else.
Now it’s time to talk about Public Liability Insurance.
Public Liability Insurance is the go-to cover for any business. It covers you and your business should a member of the public or customer become ill or injured as a result of your business operations. It also covers you in case of any damage to property.
It’s also worth adding that whilst Public Liability Insurance isn’t a legal requirement many people or businesses simply won’t hire you unless you can prove that you are insured.
We see countless examples of Public Liability claims in our line of work, some mundane, some outrageous. Below are a few examples of situations where you’d want your Public Liability cover to kick in:
The broken leg
A window cleaner is working on a ladder which is secured on a pavement. A member of the public trips over the bottom of the ladder and breaks their leg. They make a claim against the window cleaner for their loss of earnings (they’re a tap dancer by profession) and the bills for months of physio to get back on top tap-dancing form. These costs mount up to £20k (it turns out tap-dancing pays well), but luckily the window cleaner has Public Liability Insurance so the bills are sent to his insurer.
The broken window
Whilst working on a job, a builder is tasked with knocking down a wall and building a newer structure. Whilst doing so, stray debris flies off and breaks a set of glass patio doors. The customer isn’t happy, and lodges a claim against the builder, which the builder is then liable for. If he has Public Liability Insurance in place, it’s his insurer – not him – who takes the financial hit for a new set of doors.
The leaky seal
A glazier is working on a job which includes replacing windows and doors in a property. After replacing a UPVC door and several windows, he leaves the job site for the next one. However, he hadn’t fully sealed one of the windows, and a leak forms, causing the customer’s carpet to get damp and ruined. Having Public Liability Insurance in place will cover the glazier’s costs from the damage caused to the carpet, the cost of renting a dehumidifier, and the replacement of the faulty window.
The flood
A plumber fitting a new bathroom causes a flood in a customer’s home as a result of a faulty fitting. The customer claims against the plumber for the damage caused, which ends up in court. Luckily, the plumber’s Professional Indemnity Insurance will cover costs of the claim, including legal expenses and any compensation awarded in respect of rectifying the damage done.
Here at Rhino, we are market leaders in trade insurance, and Public Liability Insurance is one of our most popular policies.
Tradespeople up and down the UK rely on us to find them the perfect policy at the lowest possible price. When they take out a policy with us, they sleep easy at night knowing that they’re financially covered when a claim comes their way.
With premiums starting at just £6.07 per month, Rhino has varying levels of cover ranging from £1m up to £5m which you can tailor to the exact requirements of your business. You can also add-on cover for a secondary trade if required.
So, whatever trade you’re in, and whether you're a sole trader or a limited company, we have the right policy for you.
We’ve broken down the particulars of both Professional Indemnity Insurance and Public Liability Insurance. Here’s a quick summary of the key differences:
But which one do you need?
Public Liability Insurance is best for when you’re dealing with physical work and materials or interacting directly with the general public. So, most trades – including brickies, plumbers, painters and decorators, gardeners and cleaners – would definitely want it in place.
Professional Indemnity covers things like bad advice, professional mistakes and client data breaches. So, if your designs, advice or conduct ends up costing a customer money, you’d better hope you remembered to take this policy out. Building contractors, designers, printers, personal trainers, surveyors and just about anyone who provides advice or designs in a professional capacity needs Professional Indemnity Insurance.
To give a Rhino round up, if you’re a tradesman or woman who delivers work on-site, you’ll need Public Liability Cover. If consulting with other businesses or clients offering advice for a fee sounds like a more accurate description of your business, then you’re better protecting yourself with Professional Indemnity cover.
Remember, if you haven’t got your business covered with one of these above policies, you’re leaving yourself vulnerable to claims from disgruntled customers or unhappy members of the public.
Now is the time to get into gear and protect yourself. If something goes wrong on site, or some dodgy advice or work comes back to bite you, you’ll be thanking your lucky stars you picked up the phone to call Rhino.
Give one of our lovely team a call now on 0116 243 7904 or fill in our online quote form now for a quick and no-strings quote.
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