The Difference Between Public and Product Liability and Professional Indemnity?

The Difference Between Public and Product Liability and Professional Indemnity? Thumbnail Image

It is a common misconception that Public and Products Liability insurance (also known as General Liability insurance) can cover all liability exposures. However, the reality is that there are distinct differences between Public and Products Liability insurance policies and Professional Indemnity cover. Below is a brief breakdown of what each product insures your business against and why it is essential.

What is Professional Indemnity Insurance?

Professional Indemnity Insurance, also referred to as Professional Liability insurance or PI insurance is a type of cover designed to protect the insured party from claims arising from providing professional services or advice to a client. Depending on the nature of the profession, professional indemnity insurance may be mandatory. For more information on Professional Indemnity insurance, who should consider it, and why it is essential, check out our blog here

What does Professional Indemnity Insurance cover?

Professional Indemnity insurance protects your business from the claims made by clients or customers for any damage caused to them due to a mistake made by you or your employees in your services or advice. The policy may cover costs of :

  • Claims against services provided by your team 
  • Damages due to errors or omissions in your service
  • Claims against breach of confidentiality and sharing private information in public without the third party’s knowledge
  • Providing misleading information to the third party
  • Copyright infringement
  • Legal costs of defending and settling a claim
  • PR consultant hired to reduce the reputation damage caused 

What is Public Liability Insurance?

Public Liability Insurance can protect your business from claims arising against any bodily injury or property damage that may occur in relation to your business. An example where a claim might arise includes a customer walking upstairs in your place of business. If the stair was to give way, causing injury to the customer, then a claim may be made against your business, resulting in losses for compensation and legal costs. Or perhaps your business includes services where you operate in a client’s home. The right public liability insurance can protect you against claims arising from damage to the property in connection with the business. Having the correct public liability insurance cover is essential to ensure your business can recover these costs and continue its day-to-day operation confidently. 

What does Public Liability insurance cover?

A Public Liability insurance may cover the costs for:

  • Damage incurred to third party’s property 
  • Injuries caused to anyone due to your business
  • Legal costs of defending and settling a claim
  • PR consultant hired to reduce the reputation damage caused 
  • Damage to any products that you don’t own but are in your care 

What is Product Liability Insurance? 

Product Liability Insurance is essential for businesses whose main operation includes the selling, manufacturing, installation, servicing or repair of products. If any of these products are faulty or fail to work as promised and cause personal injury or property damage, this could result in a claim from the customer seeking compensation. For example, if your business sells a kitchen appliance that malfunctions, causing injury to the customer, the company will be liable for compensation and legal costs.

What is Public and Product Liability Insurance?

Public and Product Liability insurance is simply a policy that protects your business from claims related to physical injury and property damage to a third party that may have been caused due to your business. It covers all the benefits of product liability insurance and public liability insurance.

While Public and Products Liability insurance are not mandatory in the same way that professional indemnity insurance can be, it is highly recommended for all companies. Public and Products Liability insurance helps protect against risks that can occur daily. While you may do everything to ensure they do not happen, no business is immune to unpredictable incidents. It is essential to be adequately protected from expensive claims in those instances.

What can Public and Product Liability cover?

Public and Products Liability insurance can protect your business from claims made by clients, customers, and the public for injury or damage to their property that occurs in the operation of your business. Any of these third parties may also be able to claim that your business operation has caused emotional distress or shock. If this is the case, public and product liability insurance can protect against claims of this nature.

Depending on the type of cover, the policy may help you recover the costs of:

  • A third party is wrongfully injured by the actions of your business or your product
  • Damage to the property of a third party as a result of your business operation
  • If damage occurs to a third party as a result of advertising carried out by your business

The correct public and product liability insurance policy can help you recover costs associated with defending and settling claims, including those to do with investigating the claim. Suppose you are placed in the unfortunate position of being liable for compensation orders to the third party. In that case, the correct Public and Products Liability insurance policy can aid you in paying these costs. 

What is the difference between Public Liability and Professional Indemnity Insurance?

Public Liability insurance and Professional Indemnity insurance are different as they exclude the conditions covered by the other. The Public liability cover will exclude situations around professional services; similarly, Professional indemnity insurance will not give you a cover for any property damages or physical injury that can happen to a third party in relation to your business. 

Do I need both Professional Indemnity and Public and Product Liability cover?

As you already know what Public Liability insurance and Professional Indemnity insurance is, you can decide what cover you need depending on the particular operation of your business. If you provide advice or services in your line of work, it is recommended that you purchase both forms of cover to ensure you are in the best position to avoid any unforeseen issues. Finding the right policy tailored to the unique operation of your business can be a confusing process. Selecting the wrong cover can also be a costly mistake for your business, being exposed to claims which you are not protected against. 

To ensure the adequate protection of your business, Cerberos Brokers offers a combined Professional Indemnity, Public Liability and Products Liability Insurance Package. Having the one insurer for both PI insurance and Public and Products Liability insurance provides a more cohesive cover that extinguishes any doubt about whether you are properly protected from claims made with professional service or the supply of a product. 

 

You can quote, bind, pay the premium and receive complete policy documentation online within a few minutes. You can also pay in full or by monthly instalments. Get started today!

 

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