Owning a business involves investing in a variety of different insurance types. With the different types of policies and potential risks, finding adequate coverage can become quite overwhelming.
Some brokers have simplified the insurance process by combining public liability and professional indemnity insurance. Having it as one simple, comprehensive policy makes it easy for business owners to ensure they’re covered for every eventuality.
What Exactly is Public Liability And Professional Indemnity Insurance?
If you’ve been in business for some time, you might know public liability and professional Indemnity as two different insurances. Each covers very different criteria.
Combining the two ensures both criteria are automatically covered. While the name is quite a mouthful, public liability and professional indemnity insurance can easily be simplified in its definition.
- Public liability essentially covers payouts, legal fees and awards made against you by a third party as a result of personal injury or property damage to property caused by you directly or your business.
- Professional indemnity insurance provides comprehensive protection from claims for financial loss, bodily injury or property damage arising from professional services carried out by your business.
What Does Public Liability Insurance Cover?
As the name suggests, public liability insurance covers claims of injury or property damage made by a member of the general public. While public liability insurance isn’t compulsory, organisations regard it as good practice because of their daily dealings with the public.
Public insurance claims can be quite extensive, but some of the most common include the following:
- Slips: A customer visits your store or office and slips on a wet floor. They will then put in a claim against your business for the cost of the medical costs.
- Falls: A customer falls down the stairs on your premises and suffers a back injury. The claim they put in against your company will be for the medical and rehabilitation costs. They may also seek compensation for the time they need to take off work to recover.
- Trips: A customer or vendor trips over some loose electrical wires while on your property. Their claim will involve medical costs as well as rehabilitation costs and compensation for lost time at work.
- Assault: A customer and an employee get into an altercation on your premises. While extremely unprofessional, regrettably, it does happen. Since the employee works for your business and it happened on your premises, your company will be held liable.
What Does Professional Indemnity Insurance Cover?
Essentially, professional indemnity insurance covers claims made against your company as a result of professional negligence. This also covers errors made by your company while providing a service to the customer.
Professional indemnity insurance covers the following:
- Property damage: A plumbing contractor damages a window or cupboard during the installation of new pipes. While the actual service is up to standard, the damage was caused during the installation. Another example would be damage caused to property when a delivery crew delivers new furniture and accidentally damages the gate post as they’re driving out.
- Loss of use to tangible property: Here you’re looking at the damage caused by work done that results in a property item no longer working. An example of this would be a delivery crew accidentally damaging your gate motor as they’re reversing out, and as a result the gate no longer works.
- Unintentional breach of confidentiality: This involves sharing private or confidential information about a client without their permission. This will also include the loss of a customer’s data or confidential documents.
- Loss of customer goods: An example of this is a customer bringing in a laptop to your PC repair company expecting the item to be repaired. At some point, the unit is lost while in your company’s custody. The customer will then put a claim in against your company for a new item.
Who Should Consider Public Liability and Professional Indemnity Insurance?
Insurance experts advise any business or individual that deals with customers or vendors should invest in this insurance. This includes companies that don’t sell tangible products, such as accountants, architects or even event managers.
What Happens to Claims if You Don’t Have This Insurance?
While having this type of insurance isn’t mandatory, neglecting to invest in it will put your organisation at great risk. What it comes down to is that your company will remain responsible for the claims brought against you. Without this type of insurance, the legal fees and claim payouts could lead to bankruptcy.
There’s an old expression in the insurance industry that says “you can never have enough insurance.” The truth is, investing in the right type of insurance to cover the full extent of your business practices will give you the peace of mind to focus on what you love about having a business. Rather be safe than sorry!