professional indemnity insurance (PI) and public liability insurance (PL) are different types of business insurance that cover compensation claims It is often misunderstood how each of these business insurance policies protect businesses against risk.
Is professional liability and professional indemnity the same?
Professional Liability (also known as Professional Indemnity) allows whole the practice team to do their jobs without always looking over their shoulders. Professional Liability insurance covers claims that are actually made while the policy is in force, even if the error causing it happened years ago.
What is the difference between personal and public liability insurance?
Personal liability insurance covers injury or damage compensation claims made against you by a third party. Public liability insurance is the commercial version of this insurance – it covers compensation costs if someone makes a claim against your business for injury or damage.
What is the difference between public and professional liability?
The difference between public liability and professional indemnity insurance is that public liability is tailored for claims by members of the public for injury, illness or damage while professional indemnity covers claims by clients for professional mistakes or negligence.
Do I need professional indemnity?
You are likely to need professional indemnity insurance if: You provide advice or professional services to your clients (including consulting or contracting) You provide designs to your clients (such as working as an architect or design engineer).
What does PI mean in insurance?
Professional indemnity insurance protects you and your business against claims for alleged negligence or breach of duty arising from an act, error or omission in the performance of professional services. Find out more about Professional Indemnity insurance.
What insurance covers pi?
Professional indemnity insurance covers the policyholder for the costs of legal action made against them in respect of financial loss which occurs due to the negligence, error, or omission in professional advice or services provided by your business.
Who needs public liability insurance?
Any kind of business might need public liability insurance. If you own a physical premises where you receive customers, public liability is a must – so that’s shops, restaurants, cafés, hairdressers, pubs, and venues, plus many more.
Do I need public liability insurance as a sole trader?
Yes. The need for public liability insurance is not determined by your turnover; it depends on whether you come into contact with the public However, many insurance providers will consider your turnover when calculating your insurance premium.
Does a limited company need professional indemnity insurance?
If you’re a freelancer or contractor, it’s always advisable to ensure you have Professional Indemnity (PI) Insurance – especially if you’re running your own Limited Company.
Why do you need PI insurance?
Here are some reasons why you may need Professional Indemnity Insurance which might help make things clearer: You provide advice and consultancy – Clients can claim compensation if there’s a mistake in the advice you’ve given. You provide an expert service – In case you make a mistake in designs, plans or calculations.
What happens if I don’t have professional indemnity insurance?
What happens if I don’t have Professional Indemnity insurance? If you don’t have this protection then you could be liable for any costs relating to a claim made against you This could include legal costs and compensation.
What is not covered by professional indemnity insurance?
Here’s a list of what Caunce O’Hara’s Professional Indemnity Insurance does not cover. Including non-compensatory damages A loss caused by: ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel.
What is PLI certificate?
A public liability insurance certificate is simply a legal document that summarises the key details of your public liability insurance policy and proves your business has the right cover.
How long does professional indemnity insurance last?
Typically, run-off policies are maintained annually, for up to six years Six years is the period many professional bodies require their members to carry run-off insurance as this is the usual statute of limitation, so it’s a good benchmark to use for all professions.
Does professional indemnity insurance have VAT?
Do I have to pay VAT on my professional indemnity insurance? You don’t have to pay VAT on PI premiums However, you do need to pay insurance premium tax (IPT), which for PI insurance is subject to the standard rate of 10%.
What is personal injury under CGL?
The policy covers damages arising from personal injuries or property damage It would be stretching the ordinary terms of the policy to find that damages arising from injury to reputation falls within the category of ‘bodily injuries. ‘.
What is an indemnity certificate?
Legal indemnity insurance covers the buyer and the mortgage lender in the event of any loss of value on the property as a result of the defect The indemnity policy doesn’t actually remedy the defect – it just provides financial compensation in the event of the defect causing a loss.
Why do I need run off cover?
Professional Indemnity Insurance Run Off Cover is a policy designed specifically to provide protection for work that you have done in the past If you have retired, sold your business or just moved on, it is there to protect if a claim is made for an error or omission you may have made in the past.
When would you need public liability insurance?
You may need Public Liability insurance protection if you come into contact with third parties in one or more of these ways: Customers visit your business premises , for example you have a shop, pub or a restaurant or hairdressing/beauty salon.
Does a limited company have to have public liability insurance?
Whilst it is not a legal requirement for you to have this , if you do have people coming to your premises for meetings etc, it is strongly recommended that you take out Public Liability Insurance. A simple trip on a step could cost your business thousands in compensation and legal costs.
Is public liability unlimited?
Personal injury or death, or loss or damage to property of third parties is covered by public liability insurance. Common law claims for personal injury or death, or loss or damage to property can be very significant and are unlimited The cover provided does not limit the contractor’s liability.
Do self-employed need public liability?
If you’re self-employed, a sole trader or you work as a freelancer, you may need public liability insurance Find out more here and see if it’s right for your business. If you’re self-employed, a sole trader or you work as a freelancer, you may need public liability insurance.
What insurance do I need if I’m a sole trader?
Public Liability and Professional Indemnity are two of the most common insurance types for sole traders in South Australia. Whether you conduct business at home or use a small office, you should have Public Liability Insurance to cover accidental injuries to clients, visitors, or the business facilities.
What is an disadvantage of being a sole trader?
Disadvantages. Sole traders take on all the risks of starting their own business and have the disadvantage of unlimited liability A sole trader is liable for the organisation’s debt. This means that personal assets such as a car or house are at risk of being sold to pay off business debts.
Is it better to be a limited company or sole trader?
More tax efficient: Running your business as a limited company provides the potential for more profitability Unlike sole traders who pay 20%-45% income tax, limited companies pay 19% corporation tax so they tend to be more tax efficient. They also qualify for a wider range of allowances and tax deductible expenses.
What insurances do you need as a limited company?
- Employers’ Liability Insurance
- Public Liability Insurance
- Product Liability Cover
- Professional Indemnity Insurance
- Legal Expenses and Tax Investigation Insurance
- Directors and Officers Insurance
- Income Protection Insurance
- Key Person Insurance.
Why is professional indemnity important?
A professional indemnity policy can protect both you and the business through cover from such claims, including the costs for defending such claims You will have cover for the legal expenses and compensation associated with a claim, should you be found responsible for any damages.
Do I need employers liability insurance?
Employer’s liability insurance is compulsory because employers are responsible for the health and safety of their employees whilst at work. If an accident occurs and an employee is injured or made ill in consequence of work related activities, they will have a claim for compensation against their employer.