Understanding the Differences between Professional Indemnity Insurance and Public Liability Insurance

In the world of trade insurance, it helps to be aware of the various types of cover available to protect businesses and professionals from potential risks and liabilities. 

Two essential policies you should know about are Professional Indemnity Insurance and Public Liability Insurance. While they’re similar - and both provide financial protection - they serve different purposes and cover different aspects of potential claims. 

In this article, Rhino Trade Insurance will dive into the distinctions between these two types of insurance and shed light on why they’re so important for tradespeople. 

Professional Indemnity Insurance 101

Professional Indemnity Insurance is designed to protect self-employed trade professionals and businesses, such as Builders, Plumbers, Electricians, Joiners and more, against claims made by clients for professional negligence, errors, or omissions in their work. 

It serves to cover the costs of legal defence and any damages awarded to the claimant if the tradesman or woman is found liable. 

For example, if a building contractor drew some plans for a customer which included the removal of a wall that turned out to be weight-bearing (cue disaster), it would be the builder’s Professional Indemnity Insurance picking up the tab for making good the damage. 

We took a deep dive into Professional Indemnity Insurance which you can read here. Alternatively, if you would like to find out more about Rhino's cover, you can visit our website here. 

Right, so what about Public Liability Insurance?

Public Liability Insurance 101

Public Liability Insurance is intended to cover businesses and individuals against claims made by third parties for personal injury or property damage that occurs on their premises or as a result of the tradesperson's operations. 

For example, if a customer slips and falls whilst visiting your work unit and  they sue for medical expenses, inconvenience or lost income, Public Liability Insurance can help cover the costs of the claim.

If you are unsure of which cover is best for your trade business, we'd recommend reading on or getting in touch with our advisors. Our experts will gain a deeper understanding of the specific cover options and requirements for your trade profession or business and see you on the right path.

What does Professional Indemnity Insurance cover?

Professional Indemnity Insurance is designed to protect professionals against claims arising from oversight, mistakes, or mishaps and will cover the following:

• Professional Negligence

PI Insurance covers claims related to professional negligence, where a client alleges that the professional has failed to exercise the necessary standard of care, resulting in financial loss, harm, or damage.

• Legal Defence Costs

PI Insurance provides cover for legal costs incurred during the defence against claims, including hiring solicitors, expert witnesses, and other related expenses.

• Compensation and Damage

If the professional is found liable, PI Insurance may cover the compensation and damages awarded to the claimant, including financial losses, property damage, or personal injury.

Key features in your policy with Rhino Trade Insurance:

• Tailored Cover

Professional Indemnity Insurance policies are tailored to the specific profession or industry you work in and take into consideration the unique risks and liabilities associated with your trade, making your policy completely unique to you.

• Professional Indemnity Limits 

Your policy will have a certain limit which you choose when you purchase cover. This determines the maximum amount your insurer will pay when a claim is made. At Rhino, you can choose a limit of up to £2 million. 

What does Public Liability Insurance cover?

Public Liability Insurance is particularly important for businesses that interact with the public, which most self-employed tradespeople do in the trade industry. Public Liability will offer protection for:

• Personal Injury Claims

Public Liability Insurance covers claims for bodily injuries, such as slips and falls, that occur on the business premises or as a result of business operations.

• Property Damage Claims

This insurance also provides cover for damages caused to third-party property due to your business activities or operations. Say, for example, you are fitting a new bathroom and cause a major leak in the upstairs of the house.

• Legal Expenses

Public Liability Insurance protects you from the legal costs associated with defending against claims, including lawyer fees, court costs, and settlements or judgments.

Other key pieces to remember with regard to a policy with Rhino Trade Insurance include the following:

• Third-Party Coverage 

Public Liability Insurance focuses on claims made by third parties, such as customers, clients, visitors, or bystanders, rather than claims by clients against tradespeople themselves.

• Cover Limits

Policies specify the maximum amount an insurer will pay for a claim, and trade businesses can choose cover limits based on their specific needs and risk exposure. With Rhino, you can choose to take out insurance with £1 million, £2 million or £5 million in protection.

• Exclusions

It's worth remembering that some Public Liability Insurance policies may have certain exclusions, such as working abroad, professional services that fall under Professional Indemnity Insurance, or damage to the tradesperson's own property.

Find out everything you need to know on Public Liability Insurance by reading our blog here.

In Summary​​

Professional Indemnity Insurance and Public Liability Insurance are separate insurance policies that cater to distinct risks and liabilities. While Professional Indemnity Insurance primarily protects tradesmen and women against claims of professional negligence or mistakes, Public Liability Insurance shields your business against claims made by third parties resulting from personal injury or property damage.

Understanding these differences and selecting the appropriate cover is vital to ensure comprehensive protection and peace of mind in the face of potential liabilities. We hope that reading this has given you the information you need to accurately choose the right cover for your trade business. 

Why Choose Rhino Trade Insurance?

Rhino Trade Insurance offers incredible policy protections for almost all trades in the UK, so if you're looking for high-quality insurance, put an end to your search right now, we have your back! We offer specialised insurance that may be adjusted to fit the particular needs of your line of work. 

Call us right now to get a price, or check out our website to see what our user-friendly quote engine can do for you.