Public Liability vs. Professional Indemnity: What’s the difference?

There’s a learning curve when you start any new business and working as a pet professional is no different. One area where small business owners often get confused is buying insurance.

As a pet professional, you probably understand that insurance helps protect your business. However, it may be less clear what types of business insurance you might need or what each policy covers.

Public Liability and Professional Indemnity are two types of insurance policies that pet professionals commonly decide to look at. Each protects your business in different and important ways.

What is Public Liability insurance?

Public Liability insurance is designed to provide protection* for you and your business in the event a customer, supplier or a member of the public are injured or sustain property damage as a result of your negligent business activities.

What Public Liability typically covers (and what it doesn’t)

A Public Liability insurance policy typically covers:

• Third-party personal injuries (e.g. a customer, supplier or other member of the public)
• Damage to a third-party’s property due to your negligent business activities
• Legal and defence costs resulting from a covered claim

For example, say you own a dog grooming business. A customer comes to pick up their dog and they slip and fall in water spilled from the sink which you didn’t have time to clean up. Public Liability insurance is designed to protect you if the customer makes a claim for the medical costs from the injuries they suffered. If the customer decided to later sue your business over this, your policy may also cover the cost of defending your business in court.

There are some events that Public Liability insurance does not cover. These typically include:

• Employee injuries
• Damage to your own property
• Costs of fixing faulty workmanship
• Professional negligence
• Contractual liability
• Events that happen before or after the policy period

What is Professional Indemnity insurance?

Professional Indemnity insurance* protects you against losses claimed by a third party due to alleged or actual negligence or errors in your professional services or advice.  Your Professional Indemnity insurance will meet the associated compensation payable to a third party together with your defence costs (which can include legal costs, investigator costs and expert fees).

What Professional Indemnity typically covers (and what it doesn’t)

A Professional Indemnity insurance policy usually covers:

• Legal costs from defending or responding to the claim
• Claim investigation costs
• Disciplinary proceeding costs
• Compensation paid because of a claim (such as court awarded damages)

Here’s an example: You’re a dog trainer, and a client asks you for advice on how to care for their pet. The client follows your advice, but unfortunately their dog passes away as a result and the client claims you were negligent. Professional Indemnity insurance is designed to cover your resulting legal defence costs, plus any compensation the dog owner is awarded for their loss.

Professional Indemnity usually doesn’t cover:

• Intentional damage
• Contractual liabilities
• Professional fees
• Known claims and circumstances
• Fraud and dishonesty

Do I need both Public Liability and Professional Indemnity insurance?

Pet professionals may want to consider having both Public Liability and Professional Indemnity insurance, since they cover different types of incidents you may face because of your work.

Simply put, Public Liability can help protect you if your business operations negligently cause customers to suffer injury or property damage, and Professional Indemnity responds to claims that you provided your services or advice negligently. Both cover common types of incidents that pet professionals may face and both help protect the business you’ve built.

Public Liability insurance may be important if you:

• Work with customers, clients or the general public
• Visit clients in their home
• Have customers who visit your office, shop, or any premises

Professional Indemnity may be important if you:

• Give customers professional advice or services
• Work with any clients who require you to have this type of insurance

Head over to our partner BizCover and Get a quote on your insurance.  Use promo code WWG at checkout for a discount on the cost of your Professional Indemnity insurance.

 *As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.