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Professional Indemnity vs Public Liability Insurance: What is the Difference?

Rhino Trade Insurance 14 November 2021

Hot off the press, Rhino Trade Insurance has done it again, boiling down all that nitty, gritty insurance jargon and helping you better understand the major differences between Professional Indemnity Insurance and Public Liability Insurance. Who needs them? Are they even helpful? How much will a claim cost? They’re just some of the questions tradespeople have about these popular cover options. So saddle up and get ready for some of the most helpful information for tradesmen and women you won’t find anywhere else! 

Professional Indemnity vs Public Liability Insurance

What Is Professional Indemnity Insurance?

Professional Indemnity insurance offers protections for individuals or companies that provide any design, advice or expertise as part of their service. This is a popular insurance option that can sometimes fly under the radar for trades businesses.

Whether you accidentally lose a piece of sensitive information or data (the boring stuff), go out to see a client at their home and give advice, or they come to your business premises seeking design expertise. This insurance covers costs incurred if a customer alleges that you provided faulty advice and they have suffered a loss as a consequence.

It goes without saying that you will deliver a fantastic service, however, we can all make errors on occasion, and it can sometimes be the simplest mistake that ends up being the most expensive. This insurance covers you against any of these likely significant costs, which would be better spent on treating the family or a few pints with the lads down the pub! 

What is Public Liability Insurance? 

Public Liability Insurance is the go-to cover for any business. It covers you and your business should damage be caused to a property or injury to a member of the public that is deemed your fault.

Rhino has varying levels of cover ranging from £1million up to £5million which you can tailor to the exact requirements of your business. So whether you're a sole trader or a limited company, we have the right policy for you.

Not all superheroes wear capes, but thankfully our policy will pay out the legal expenses and any compensation owed by your business. Boom!

When do I need Public Indemnity Insurance?

We’ve searched our back catalogue of Professional Indemnity claims and below are some examples. If you’re still here, grab a cuppa or something more substantial if you wish and check out these bad boys: 

  • You’re a builder working on a driveway redesign. After offering some advice on the design, the drive ends up creeping onto the neighbour’s land - making them rather unhappy. To put this right, the clients would be able to claim for costs to rectify this error due to your bad advice. 
  • Whilst setting up a new business, a building company copies a well-known competitors logo style, designs, and replicates part of their business model and website. When this well-known competitor finds out and gathers enough evidence, they would be able to lodge a claim and sue via Professional Indemnity cover.

When Do I Need Public Liability Insurance?

We could pick countless examples of public liability claims, some outrageous, some mundane. Below are a few examples of when you might need your Public Liability cover to kick in:

  • Whilst working your trade as a builder on a job, you are tasked with knocking down a wall and building a newer structure. Whilst doing so, you try to set the world’s strongest man award by knocking the wall down in record time, but shards split off and damage the customer’s window. The customer is rightly irate and it’s your business that is now footing the bill.  
  • You’re working as a glazier in a clients business and are re-doing their entire building. After replacing a PVCU door, back door and windows, you leave the job happy, but you haven’t fully sealed the window and a leak forms, causing the customer’s carpet to get damp and ruined. Having Public Liability Insurance in place will cover the costs from the damage caused.  

We get some of these may sound like something off of Fawlty Towers, but they happen. Without Public Liability Insurance, the tradesman would have been liable to pay thousands of pounds in compensation. Imagine what you could spend all that money on instead, a trip to Vegas, AJ fight, 1000’s of pints of lager? The list is endless! 

Professional Indemnity And Public Liability Insurance, Do I Need Both?

You’re probably wondering if all this is scaremongering. “Why do I need these policies, and do I need one or the other?’. The best way we can describe it is that Public Liability Insurance is great for when you’re dealing with physical products or interacting directly with people or the general public. It’s also worth adding that whilst Public Liability Insurance isn’t a legal requirement many people or businesses simply won’t hire your services unless you can prove that you are insured.  So unless you want to spend more time sitting at home waiting for the phone to ring, your best bet is to get some cover. 

Professional Indemnity covers anything from giving out shoddy advice, losing sensitive information from a client or just simply leaking information - by accident, we don’t mean you have to be Edward Snowden. Put simply, if your advice is terrible and loses the client money, then you may be liable. 

To give a Rhino round up, if you are a tradesman or woman who delivers exceptional work on-site, you will need Public Liability Cover. At the same time, if you also consult with other businesses or clients offering advice for a fee, then you’re best off protecting yourself with Professional Indemnity cover. 

And that’s all, folks.

Another *hopefully* helpful, insightful and eye-opening post about our lovely insurance policies. If you haven’t got your business covered, now is the time to get into gear and protect yourself. If something goes wrong on site, you will usually find yourself in thousands, not hundreds, thousands of pounds worth of trouble. Confused by all this, give one of our lovely team a call now or fill in our online quote form now. 


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