Janardhan NWhat if the insurance policy you have isn’t the best one for your business?
You are not alone if you are unsure about the difference between public liability and professional indemnity insurance.
It’s one of the most frequently asked questions by professionals and business owners when it comes to selecting the right coverage. And you’re in the right place to finally get a clear answer.
Both types of insurance are seeing massive growth.
The public liability market is expected to hit $123.5 billion by 2025. That’s partly because of more accidents at workplaces and tighter regulations.
On the other side, professional indemnity insurance is catching up too. It was valued at $5.5 billion in 2024, and it’s growing even faster, with professionals facing rising litigation risks, compliance challenges, and tech-related liabilities.
Clearly, the need for these insurances are growing across industries. The real challenge is knowing which type of insurance fits your situation best.
In this guide, we’ll break down the key differences between public liability and professional indemnity insurance, explain who needs what, and help you make the right decision.
Mitigata: Leading PI Insurance Service Provider
Mitigata works with professionals and businesses across industries, helping them get the right cover from the right insurer. Whether you need PI insurance, public liability, or both, we start by understanding what you actually do day to day.
Then, we connect you with insurers who know your line of work. No generic policies. No confusing terms. Just straightforward advice, real support, and insurance that makes sense.
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- Competitive rates with coverage that actually protects you. No hidden gaps.
- Insurers who get your risks, not just your industry category.
- We do the legwork – quotes, paperwork, follow-ups – so you can keep running your business.
- Fast support when things go sideways. No red tape. No long waits.
- We’re available when you need us. Claims and problems don’t wait for office hours, and neither do we.
What Is Public Liability Insurance?
Public Liability insurance is your protection when someone gets hurt or their property gets damaged because of your business activities – and they decide to sue you for it.
Here’s what it typically covers:
- Bodily Injury to Third Parties: When someone gets physically hurt on your business premises or due to your business activities.
- Property Damage to Third Parties: When you accidentally damage someone else’s belongings or property.
- Legal Defence Costs: The expensive lawyer fees, court costs, and legal expenses to defend yourself against claims.
- Compensation Payments: The actual money you need to pay if found liable for damages.
What Is Professional Indemnity Insurance?
Professional indemnity insurance, often known as errors and omissions insurance, protects against financial damages caused by errors, negligence, or failure to provide promised services in your profession.
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Here’s what it typically covers:
- Professional Negligence Claims: When clients say you didn’t meet the standard of care expected from a qualified accountant.
- Errors and Omissions: Mistakes you made or important things you forgot to do in your professional work.
- Legal Defence Costs: Even if you win the case, you will have high legal bills, court costs, and time spent defending yourself.
- Misrepresentation: If you are accused of delivering incorrect or misleading advice.
- Breach of contract: When you do not perform your professional obligations as agreed.
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Public Liability vs. Professional Indemnity Insurance: Key Differences
These two types of insurance are commonly mentioned together, yet they address quite different concerns.
Public liability insurance covers you in the event that someone outside your company, such as a customer, client, or visitor, is injured or their property is damaged as a result of your business activities.
Professional indemnity insurance, on the other hand, protects you if a client claims that your service or advice caused them financial harm. It does not result in physical injury or property damage.
Here’s the main distinction in plain terms:
Public Liability: Someone gets physically wounded or their property is damaged.
Professional Indemnity: Someone loses money because of your professional advice or services.
Let’s break this down with real examples:
Public Liability Insurance Scenarios:
- Your office door glass shatters and cuts a visitor
- You accidentally knock over expensive equipment while visiting their office
- A client slips on your wet office floor and breaks their ankle
Professional Indemnity Insurance Scenarios:
- Wrong GST classification leads to ₹8 lakhs in penalties for your client
- Wrong financial projections affect their business decisions
- Late ITR filing causes your client to miss a loan deadline
Here’s a simple way to tell the difference:
| Claim Type | Covered by Public Liability | Covered by Professional Indemnity |
|---|---|---|
| A client slips and gets injured | ✅ Yes | ❌ No |
| You damage a client’s laptop | ✅ Yes | ❌ No |
| A client sues you for bad advice | ❌ No | ✅ Yes |
| A missed deadline costs the client money | ❌ No | ✅ Yes |
| You break something at a client site | ✅ Yes | ❌ No |
| Your mistake causes a loss of revenue | ❌ No | ✅ Yes |
What to choose: Professional Indemnity or Public Liability Insurance
Here’s the easiest way to figure it out:
Ask yourself two questions:
Could someone get hurt or have their property damaged because of my business?
Could a client lose money because of something I said, did, or advised?
If the answer is yes to either, you need one of these insurances. If the answer is yes to both, you probably need both.
For example:
An architect who meets clients in their studio and provides design plans? Needs both.
A marketing consultant who works from home and gives advice remotely? Likely needs PI.
How much does public liability and professional indemnity insurance cost?
Insurance costs are not one-size-fits-all. Your premiums are determined by your business type, risk profile, coverage requirements, and claims history. Here’s an estimated breakdown of how much you should expect to pay and the factors that influence pricing.
Professional Indemnity Insurance (PI)
- Low-Risk Professionals (accountants, photographers, consultants)
- Annual premiums start from ₹2,500 to ₹10,000 for ₹1 crore coverage
- Medium-Risk Professionals (IT consultants, marketing agencies, architects)
- Expect ₹30,000 to ₹90,000 annually, varying by specific risk factors
- High-Risk Professionals (medical practitioners, engineers, financial advisors)
- Premiums can extend well beyond ₹1 lakh annually due to higher claim potential
What Drives Your Premium
Your profession determines the baseline risk assessment. Doctors and engineers face higher premiums than graphic designers because the potential for costly errors differs significantly. Coverage amount directly impacts cost – choosing ₹5 crore over ₹1 crore coverage increases premiums proportionally.
Business size matters too. Larger firms with more employees and higher revenues typically face greater exposure and pay accordingly. Your claims history creates a risk profile that insurers use to set rates, while regional factors like local legal costs and litigation frequency also influence pricing.
Public Liability (PL) Insurance
- Office-Based Businesses (consultancies, agencies, professional services)
- Annual premiums typically start around ₹20,000 for standard coverage
- Customer-Facing Businesses (retail stores, restaurants, event companies)
- Premiums range from ₹50,000 to several lakhs, depending on risk exposure
- High-Risk Operations (construction, manufacturing, entertainment venues)
- Costs can reach lakhs of rupees due to significant public interaction and physical hazards
What Drives Your Premium
Business operations create the foundation for risk assessment. A construction company faces dramatically higher premiums than a consulting firm because the likelihood of third-party injuries differs substantially. Public interaction levels directly correlate with premium costs – more visitors and customers mean greater exposure.
Your business location influences rates through factors like foot traffic, proximity to busy areas, and regional claim patterns. As with PI insurance, higher coverage limits increase premiums, and any history of public liability claims will push costs upward.
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Conclusion
Public liability and professional indemnity insurance cover quite distinct risks, yet both might be important depending on how your business operates. Understanding this difference is the right way to avoid gaps that could cost you later.
Mitigata makes it easy to get the right coverage for your practice. We handle the complex comparisons so you can focus on serving your clients.
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Get your quote from Mitigata today. Contact us now.
