The difference between Public Liability and Professional Indemnity insurance

They are two of the most common types of business insurance, but do you really know what they are protecting you from? 

Let’s take a look at these two different forms of cover and how they can protect your business and the businesses you refer to us.

What is Public Liability insurance*? 

Public Liability Insurance is designed to provide protection for you and your business in the event a customer, supplier or a member of the public are injured or sustain property damage as a result of your negligent business activities.  

Every day you work closely with your clients and members of the public, making Public Liability insurance an important type of insurance for disability support workers.

Public Liability insurance is designed to provide protection for you and your Disability Services business in the event a patient, supplier or a member of the public is injured or sustains property damage as a result of your negligent business activities.

A public liability claim could arise from forgetting to clean a spill on the floor, causing someone to slip and injure themselves or damaging your client’s property while it is in your care.

What is Professional Indemnity insurance*? 

Professional Indemnity protects you against losses claimed by a third–party due to alleged or actual negligence or errors in your professional services or advice. Your Professional Indemnity insurance will meet the associated compensation payable to a third –party together with your defense costs (which can include legal costs, investigator costs and expert fees). 

An important form of insurance that is designed to respond to claims against your business for losses incurred by a client as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice.

Professional Indemnity claims could be caused by your negligence, errors or omission in the provision of your professional support service such as a failure to follow emergency procedures.

Your Professional Indemnity insurance will cover matters such as:

  • An award or settlement of compensation payable to a third party; and
  • Defence costs (such as legal fees, investigation costs, expert fees)

Professional Indemnity insurance is a ‘claims made’ type of insurance, meaning your current Professional Indemnity policy will only respond to claims made against you in the policy period, even if those claims concern your past work.

Should you decide to stop working as a Disability Support Worker, there is an option to include what is commonly referred to as ‘run-off cover’. This type of insurance is designed to provide protection from professional negligence claims even after you have stopped working.

It is important to note that the policies offered through BizCover, do not provide cover for procedures that would require a medical or nursing qualification.

Public Liability insurance: what is typically covered and excluded? 

Public Liability insurance provides compensation for: 

  • personal injurysufferedby a third–party (e.g.a customer, supplier or member of the public) 
  • damage to property owned by a third–partydue toyour negligent business activities 
  • legal and defence costsassociated with a covered claim 

Many public liability policies also provide cover for product liability.  Product Liability insurance* protects your business against claims by third parties relating to property damage or personal injury allegedly caused by your products 

 The following are not typically covered by Public Liability insurance: 

  • Injuries to your employees 
  • Damage to yourownproperty 
  • Costs of rectifying faultyworkmanship 
  • Professional negligence 
  • Contractual liability 
  • Events occurring before or after the policy period 

Professional Indemnity insurance: what is typically covered and excluded? 

Depending on the type of Professional Indemnity insurance you take out, your policy could cover: 

  • Payment of compensation as a result of a claim, including but not limited to Court awarded damages  
  • An award of legal costs against you   
  • Reasonable legalcostsincurred in defending or responding to the claim  
  • Claim investigation costs  
  • Disciplinary proceeding costs  

Professional Indemnity insurance will typically not provide cover for: 

  • Intentional damage   
  • Contractual liabilities   
  • Professional fees   
  • Known claims and circumstances  
  • Fraud and dishonesty  

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Why do Disability Workers need Public Liability and Professional Indemnity Insurance* ?

Part of your role as a disability support worker, is to provide care that gives your clients the opportunity to experience a more satisfying and fulfilling lifestyle.

You may be helping them perform daily activities, such as shopping, community activities or enjoying their hobby. Your clients put their trust in your specialist services and professional advice, relying on you to help them live their best lives.

Having Professional Indemnity and Public Liability insurance as a disability support worker is vital important to provide protection for you while you help your clients.

Whether you a sole trader, contractor or carer possibly as part of the National Disability Insurance Scheme (NDIS), you could be exposed to risks that may result in a Professional Indemnity or Public Liability claim against you.

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