Public liability insurance and professional indemnity insurance are two very different products. It’s important not to confuse one for the other.
If you’re just beginning to learn about what insurance is available as a freelancer, it can be confusing to hear about all of these different products.
“How does public liability differ from professional indemnity?”
“And there’s legal expenses insurance, too. But didn’t you say professional indemnity insurance includes legal fees?”
“My client is asking me to have general liability insurance. Is that the same as public liability insurance?”
It can feel like a bit of a minefield when you first wade into the insurance world. The simple thing to remember is that public liability and professional indemnity cover different events, so make sure you are buying the product that suits the type of work you.
Professional indemnity and public liability insurance: a simple breakdown
In simple terms, think of the professional indemnity policy as insurance for problem clients and silly mistakes you make in your work. This is the policy that would assist you if there were accusations of negligence around the service you provide your client.
Then we have public liability insurance for when someone sustains an injury or you cause damage to third-party property. This is the policy that would assist with any physical accidents or injuries that a third-party sustains as a result of your work activities.
Because public liability is for accidents and injuries that third-parties have sustained, it’s more popular in some circles than it is in others.
For example, public liability is a popular cover amongst photographers because their job is hands-on with clients. Photographers often venture out into different locations and this can put their subject matter’s safety at risk. Those abandoned buildings look great in photos, but they aren’t always the safest of locations.
Even if you have it written into your terms that your client’s safety is their responsibility, there’s nothing stopping them from blaming you if they suffer an accident.
Web designers who work fully remote, on the other hand, are less likely to carry public liability insurance. There’s little chance of a client blaming a remote web designer for an injury they’ve sustained because they haven’t come face-to-face with one another.
With that said, a lot of our customers choose to have public liability insurance because it’s a cheap cover and clients often request it.
Examples of professional indemnity and public liability claims
Let’s run through some examples and which product would assist in that scenario so you have more context around how each product works.
Professional indemnity claims
Jackie develops a website for her client, but technical issues lead to a delay in the launch. Jackie’s client pursues her for loss of income since they missed their deadline.
Jim makes a typo on the copy he’s written for a client’s product packaging. Nobody notices until after the packaging has been printed and this leads to an expensive reprint. Jim’s client wishes to recover the cost of this from him.
Mylo designs a logo for a client, but a third-party accuses Mylo of infringing their existing trademark. They claim damages for copyright infringement.
Public liability claims
David rests his bag of equipment on the ground, but a member of the public doesn’t see it and trips over it. They break a leg and pursue David for compensation.
Sarah is photographing on location and causes damage to third-party property. The property owner pursues Sarah for the cost of repairing the item of property.
With these examples you can hopefully see the difference between each product.
All of the professional indemnity examples are based around an accusation of professional negligence with the service the freelancer has provided. A missed deadline, a mistake with the copy, an accusation of copyright infringement…
With the public liability examples, the common theme is physical damage or destruction. Damage to a member of the public or destruction to third-party property.
Now you can see why it’s important to distinguish between public liability and professional indemnity insurance. They both cover very different scenarios.
Oh, and to revert to those questions we posed at the beginning of this blog post.
“How does public liability differ from professional indemnity?”
Hopefully we’ve addressed this.
“And there’s legal expenses insurance, too. But didn’t you say professional indemnity includes legal fees?”
It does. Your professional indemnity policy includes legal fees in the defence of a claim, but legal expenses offers additional legal cover.
“My client is asking me to have general liability insurance. Is that the same as public liability insurance?”
If your client is asking for general liability insurance we can assume they’re from the US where public liability insurance is called general liability.
Further reading
If you’d like to delve deeper into both products I suggest the following articles:
