Reviewed by Jeff Forbes
Co-Founder & Account Director
On this page
- What is the difference between public liability and professional indemnity insurance?
- How do I tell whether my business has a professional indemnity exposure?
- What goes wrong when a business holds only one of the two policies?
- If my advice leads to damage, which policy pays, or does neither?
- Which businesses commonly need both public liability and professional indemnity insurance?
- I only need public liability, don't I?
- Can I get both covers on one policy?
- FAQ
What is the difference between public liability and professional indemnity insurance?
Public liability is for physical harm: someone outside your business is injured, or their property is damaged, because of something your business did or did not do. Professional indemnity is for a client who says your advice, design, specification or report was wrong. The loss is usually money, and some wordings also cover injury or damage arising directly from a breach of your professional duty.
Public liability is the customer who trips in your car park, the visitor hurt on your site, or the water that escapes from a pipe you installed and ruins a client's floor.
Professional indemnity is the client you told which system to install, what the structure could carry, what the building was worth, how to sequence the project or what the report concluded, when that turned out to be wrong.
What separates the two is the trigger, whatever the size of the claim, the type of client or how serious the mistake was. If a policy's trigger did not happen, that policy has nothing to respond to.
How do I tell whether my business has a professional indemnity exposure?
Ask one question. Can your client lose money because of your work without anyone being injured and without anything being damaged? If the answer is yes, there may be a professional indemnity exposure, and public liability is generally not built to answer it. If the answer is genuinely no, public liability may be all your work needs.
Most owners answer with their job title. "I'm a sparky, not a consultant." "I lay concrete, I don't give advice." What decides it is whether, in a normal week, somebody pays for your judgement as well as your labour.
Run the question against what you do:
- Do you ever tell a client which product, system or material to use?
- Do you produce a design, a drawing, a specification, a scope or a schedule that someone else builds or buys from?
- Do you inspect something and report what you found?
- Do you quote on a job based on your own assessment of what the job needs?
- Does anyone forward your email to a third party as the reason a decision was made?
What goes wrong when a business holds only one of the two policies?
Often, nothing responds. A public liability policy generally responds to injury or property damage, so a claim built purely on wrong advice may find nothing there to trigger it. The limit looks healthy and the premium was paid. The business simply holds the wrong policy for the claim that turned up.
Take a worked illustration. Say an electrical contractor installs a solar system for a commercial client. The installation is correct. An inspector would sign it off without a note. The problem sits earlier, in the design and the specification: what was specified for that site was wrong for that site. The system never does what the client was told it would do, and the client ends up around $200,000 worse off.
Nobody was injured and no property was damaged, so public liability may not respond at all. The loss is purely financial and came from the advice about what to install, not from the installing, so professional indemnity may be the relevant cover. The contractor holding only public liability has a policy in force, an excess it can afford and a limit that would have been plenty, for a claim that policy may not answer.
The gap runs the other way as well. A consultant working from a laptop holds professional indemnity and no public liability. Then they knock a client's screen off a desk, or a courier trips over a cable at the workshop they run. The screen is property damage and the courier's fall is injury, and professional indemnity may have nothing to say about either.
If my advice leads to damage, which policy pays, or does neither?
It comes down to the wording of each policy, its printed terms, so the two have to be read together. When advice you were paid for leads to someone being hurt or something being damaged, your public liability may exclude it. Whether your professional indemnity takes it depends on its own wording.
On most of the general liability wordings we place, the standalone public liability policies, professional advice you gave for a fee is excluded. Only a few cover the injury or damage that paid advice causes. Most cover only advice you gave for free.
Professional indemnity starts from the other side. Some of the professional indemnity policies we place exclude injury and damage unless it comes directly from a breach of your professional duty. That means work below the standard a reasonably competent person in your line of work would deliver.
So a wrong specification that also damages a client's property needs both wordings checked. We compare what each one covers, what each excludes and each one's other insurance clause, the term that says how a policy shares a claim another policy also covers.
Which businesses commonly need both public liability and professional indemnity insurance?
Any business that has people around its work and gets paid for its judgement. Builders and trades who advise or design, engineers, architects, project managers, IT and managed service providers, fire and security contractors, consultants and property professionals commonly need both.
- Builders and trades who give advice or produce a design. The hands-on risk sits in trades insurance and construction insurance. The advice risk gets missed because it does not feel like advice while you are giving it.
- Engineers, architects and building designers. The drawing is the product a client relies on. See professional indemnity insurance for engineers and, for architects, the Queensland, Victoria and New South Wales rules. Whether a building designer's, certifier's or surveyor's licence class makes it compulsory is in our guide to their requirements.
- Project managers. They decide sequence, cost and risk for the client, usually while standing on a site.
- IT businesses and managed service providers. They give advice, write specifications and hold access to a client's systems, all at once. IT liability and technology insurance can hold both covers in one policy, and cyber insurance is usually the third cover in the conversation.
- Fire and security contractors. They install equipment whose whole purpose is that someone relied on it being specified correctly.
- Consultants of most kinds. See professional indemnity insurance for consultants.
- Property professionals. Agents, managers and valuers give advice on the largest numbers most clients will ever act on. See professional indemnity insurance for real estate professionals.
A business that is missing from the list may still carry the exposure. Two businesses with the same trade licence can carry completely different risks, so the question above is the one to ask.
I only need public liability, don't I?
Ask yourself the question a broker would ask. Do you ever advise, recommend, design, specify, inspect, or tell clients what solution they should use? If so, ask the follow-up: if that advice was wrong and cost the client money without damaging anything, where would that claim be insured? If you cannot name the policy, that is the gap.
Most owners who say "I only need public liability" are answering honestly about the risk they can see: the trip, the spill, the site accident. The advice risk stays invisible until a client claims, and by then the claim is very expensive.
If the honest answer is no, because you sell labour and materials and nothing else, that is a good outcome to have confirmed, and public liability may be enough.
Can I get both covers on one policy?
Yes, for some professions and businesses, with professional indemnity and public liability as two sections of one policy. What is available, the limits and any optional sections depend on the insurer and the work you do. Cyber is included only where the wording and the schedule you choose, the pages that list what the policy includes, provide it.
The product name on the policy tells you very little. Products sold under the same label range from professional indemnity and public liability alone to a genuine combined policy with cyber. The wording and the schedule decide which one you have.
Outside those combined policies, many business packs can include public liability. Professional indemnity is normally a separate section you have to ask for, or a separate policy. Business insurance sets out what a pack usually does and does not carry.
IT and media businesses have combined options of their own: IT liability insurance, technology insurance and media liability insurance.
In January 2026, the middle premium among the sole practitioners and small practices we insure on a combined public liability and professional indemnity policy, with professional indemnity at $1 million, was $1,543 a year, the whole policy with our fee.
FAQ
What is public indemnity insurance?
Public indemnity insurance usually means public liability, professional indemnity, or both. Consolidated Insurance Brokers first finds out which cover your contract or client is asking for. Public liability is for someone hurt or something damaged because of your work. Professional indemnity is for a client who loses money after relying on your advice or design.
Do I need both public liability and professional indemnity insurance?
You may, because the two policies respond to different triggers, and we check your business against each. Public liability responds to injury and property damage, professional indemnity to financial loss from your advice, design, specification or report. Whether you need public liability when clients never visit your premises is on business insurance.
Can I get public liability and professional indemnity insurance on one policy?
Yes. Some professional indemnity wordings we place carry a public and products liability section in the same document, for other professions as well as for businesses in IT, technology or media. Others hold them separately, so we read the schedule to check both are named. Professional indemnity can also appear as professional liability or errors and omissions insurance, often called E&O. If a policy you already hold carries none of those names, we find out whether you have the cover at all.
Does public liability insurance cover bad advice or a design mistake?
Generally no. Public liability responds to injury or property damage, so a claim on wrong advice alone may not trigger it, even where the loss is large and the fault clear. The cover for a wrong specification, design or recommendation that cost a client money is professional indemnity, and we arrange it.
I am a builder or tradesperson. Do I need professional indemnity as well as public liability?
Possibly. It depends on the work you do. We ask whether you specify products or systems, produce or amend a design, inspect and report, or tell clients which solution to use. Each means a client relies on your call, and a wrong call can leave them out of pocket with nothing damaged. Professional indemnity is the cover for that risk. The physical side sits in trades insurance and construction insurance.
My contract requires both public liability and professional indemnity. How do I know the limits are right?
Read the contract's insurance clause before you buy, because the limits it sets are a condition of doing the job. We check three points between the contract and the policy: the limit, whether it applies to each claim or across the whole policy period, and whether legal defence costs sit inside it or on top. Our professional indemnity page explains all three.