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As a business, it can be difficult to know which insurances are necessary to purchase.
One question we’re commonly asked here at Prizm Solutions is what the difference is between Professional Indemnity (PI) Insurance and Public Liability Insurance (PL), and whether a business might need to purchase both.
Whilst PI & PL may seem similar, and are sometimes mentioned together, these policies have completely different purposes and insure against very different risks.
Professional Indemnity Insurance
Professional indemnity insurance covers against financial claims arising from negligence.
Professional Indemnity (PI) Insurance is designed to protect businesses and individuals that provide advice, consultancy or professional services. It covers claims of negligence, such as mistakes or omissions in the advice or service provided that lead to financial loss for a client.
For example, if an error by a graphic designer leads to extra print and production costs for a client, PI insurance could cover the compensation costs.
Professionals like consultants, accountants and architects often need PI insurance, and it can be mandatory in certain regulated professions and industries. If you're not sure if you need it, find out more from our website or just give us a call and we'll be happy to clarify.
Public Liability Insurance
Public Liability insurance is essential for businesses which interact with the public, whether through a physical storefront, at events or via on-site services.
For instance, if a customer slips in a shop and is injured, PL insurance can step-in to help cover medical costs and/or legal fees.
This insurance is vital for businesses like retail stores, restaurants and tradespeople, helping them manage the financial risk associated with accidents on their premises or at their locations of work. If you’d like to know if you need Public Liability Insurance, read more on our website or just get in touch.
