FAQs
The key difference between public liability and professional indemnity is that while public liability covers for risks of injury or damage, professional indemnity is focused on the work side of things, covering for professional errors and negligence.
What is the difference between professional and liability insurance? ›
General liability covers physical risks, such as bodily injuries and property damage. Professional liability insurance covers more abstract risks, such as errors and omissions in the services your business provides.
What is the purpose of professional indemnity insurance? ›
Professional Indemnity Insurance protects you and your business against claims for alleged negligence or breach of duty arising from an act, error or omission in the performance of professional services.
Who should have professional indemnity? ›
Professional indemnity is designed to provide cover to professions who give advice or provide a service as part of their business. Examples of professions that normally require PI are: IT consultants. business consultants.
What is the difference between limit of liability and professional indemnity? ›
The limitation of liability does not include amounts that are or would have been recoverable under a policy of professional indemnity insurance; and. The $1 million cap on liability would apply to uninsured loss or damage.
Is professional and public liability the same? ›
The difference between public liability and professional indemnity insurance is that public liability is tailored for claims by members of the public for injury, illness or damage while professional indemnity covers claims by clients for professional mistakes or negligence.
What are the two basic types of professional liability policies? ›
The two basic types of malpractice insurance are "claims-made" and "occurrence-made." "Claims-made" insurance protects you from malpractice claims only if the company that insured you at the time of the alleged "occurrence" is the same company at the time the claim is filed in court.
What does professional indemnity insurance not cover? ›
Losses due to Prohibited Acts or Omissions: The policy does not cover losses caused by dishonest, fraudulent, criminal, or malicious acts or omissions.
What is an example of a professional indemnity? ›
Professional indemnity claim example
Professional indemnity insurance provides cover for a range of scenarios that could cause financial loss or damage to your client, such as loss of documents, breach of confidentiality, making defamatory statements, breaching copyright, or incorrect advice.
Do I need run off professional indemnity insurance? ›
If you're only taking on a one-off contract, then you need run off insurance. This also applies if you're winding up a company that has professional liabilities. This way, you will continue to be protected against claims long after the contract work has been done.
You can usually choose between £50,000 and £5 million of professional indemnity insurance. Your regulator, professional body or client contracts may tell you the minimum amount you need. Think too about the scope of your projects and the potential compensation demand if something went wrong.
What are other names for professional indemnity? ›
Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors & omissions (E&O) in the US, is a form of liability insurance which helps protect professional advising, consulting, and service-providing individuals and companies from bearing the full cost of ...
Why can't I get professional indemnity insurance? ›
Professional Indemnity Insurance can only be added to your policy if you purchase either Public Liability Insurance or Buildings and Contents Insurance. Professional Indemnity Insurance isn't available to professions that must have compulsory or regulated policy cover.
Why do professionals need professional indemnity insurance? ›
This type of insurance responds to claims of negligence, oversights, malpractice, or errors your clients allege you committed while providing your services. If a client, or a former client, thinks that your bad advice caused them financial or reputational damage, they may choose to sue you.
Is professional indemnity the same as directors and officers liability? ›
D&O insurance covers only managers and directors for claims related to their work and duties to the business. PI insurance covers any professional and business from third-party claims regarding their service or advice.
How important is professional liability insurance? ›
Any business that sells its expertise should consider professional liability insurance. Also known as errors and omissions (E&O) insurance, this coverage protects your company and your bottom line from customer claims of late, incomplete, or unsatisfactory work. Accusations like these can lead to costly lawsuits.
Is legal liability the same as professional liability? ›
Both cover your business from lawsuits.
Running a business means you run the risk of being sued and you might face steep costs related to legal expenses. Both general liability and professional liability will cover your legal expenses for certain types of problems, like accidents and mistakes.
Is management liability insurance the same as professional liability insurance? ›
Management liability, also known as directors and officers' insurance, includes extra coverage for the individual directors or officers of a business for their official company actions. Long story short, it's coverage for your managers. That's the big difference between it and professional liability.
Is professional liability the same as employer liability? ›
There are two key things an individual professional liability insurance policy does that an employer's policy may not: An individual professional liability insurance policy like those NSO provides covers you as a nurse 24/7–an employer's policy only covers you when you're on the clock.