The business owner of today is constantly bombarded with different insurance options. If you aren’t well versed in the topic of insurance, it can be tough to know which ones you need and which ones you don’t.
Today we’ll be taking a look at public liability and professional indemnity insurance to help you determine which option is right for you and your business.
What is Public Liability Insurance?
Public liability insurance is consumer focused. It covers your legal requirement to pay for compensation associated with injury or damage caused by a third party.
Public liability insurance will provide cover to your business in instances such as:
- Injury compensation claims when a customer is injured on your business premises
- Property damage compensation claims from any damages to property that occurred on your premises
- Any legal fees associated with any of the claims as listed above
Within different industries, such as the health care industry, different public liability insurance protocols must be followed as this form of insurance isn’t a one size fits all solution.
Important information to know about public liability insurance includes:
- Public liability insurance only covers situations relating to customers and members of the general public, not staff.
- The monthly premiums of a public liability insurance policy are determined by a number of factors. These factors include the nature of your business, its turnover and the level of cover you opt for.
- If a person were to die on your premises due to negligence on your business’s part, the deceased’s family can claim from your public liability insurance policy.
What is Professional Indemnity Insurance?
Professional indemnity insurance is focused on business dealings. Professional indemnity insurance protects you from the risks associated with providing advice and recommendations to clients.
Professional indemnity insurance will protect you should a client suffer losses stemming from your advice including:
- Professional negligence
- Accidental copyright infringements and breaches of confidentiality
- Loss of data or documentation
- Errors and omissions
- Defamation of character, slander or libel
Certain professions, including architects, accountants and business consultants, require professional indemnity insurance.
Important information to know about professional indemnity insurance includes:
- A professional indemnity insurance policy won’t cover any issues relating to employer’s liability, bankruptcy, bodily injury or fine and penalties incurred.
- The cost of a professional indemnity insurance policy is dependent on the size of your business, the industry you’re operating in and the level of cover you opt for.
- When you take out a professional indemnity insurance policy, you’ll receive a certificate of the same name. A professional indemnity insurance certificate provides peace of mind to you and your clients alike.
Other Types of Insurance Every Business Owner Needs to Know About
While public liability insurance and professional indemnity insurance are often discussed, there are other types of insurance that you may need to consider. Let’s take a look at them.
Product Liability Insurance
Product liability insurance is similar to public liability insurance in more than just name. For businesses that manufacture products for customers and the general public to use, product liability insurance is a must. Essentially, this policy covers you from damages caused by your product or products.
Whether you own your own building or run a small business from home, property insurance is always a good idea. Property insurance will protect inventory and office tools & equipment in the event of theft, fire, vandalism & more.
Commercial Auto Insurance
If you have company vehicles that carry employees, products or equipment you’ll want to look into taking out a commercial auto insurance policy. Commercial auto insurance will cover your vehicle in the event of collisions and damages.
Workers compensation is a form of insurance that protects your business in the event of an employee being injured while on the job. Workers compensation will provide wages and medical-related benefits to the employee in exchange for their right to sue for damages.
Business Interruption Insurance
Business interruption insurance protects a business when it cannot operate during disasters or catastrophes. When such an event takes place, business usually grinds to a halt and losses are consequently experienced. This is especially true in businesses that require a physical location to operate.
Now that we know what public liability insurance and professional indemnity insurance are, it should be relatively easy to decide which option is right for your business.
In a nutshell—if customers physically visit your business’s premises then public liability insurance is a non-negotiable. If you provide your clients with advice or recommendations, professional indemnity insurance is what you’ll need. And if you fall into both categories, then you’ll need both types of insurance.
Based on your business’s operation: do you need one or both? And if you have more questions, please leave a comment below.