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Public liability or professional indemnity? What’s the difference?

13 July 2018

It’s a great question. And one that’s asked by many real estate professionals (often after an incident has already occurred).

While public liability and professional indemnity both protect your business from legal action and compensation awards, they offer different forms of protection for your business activities.

Public liability insurance protects your agency against financial risk for property damage or bodily injury suffered by an associated third party. This refers to your agency’s degree of control over a property, its ownership and occupation.

Professional indemnity insurance protects you and your agency from any civil liability for claims made by third parties arising from the conduct of an agent's business that has caused alleged loss or damage.

If I have both, won’t there be overlaps in cover?

Policy exclusions are used to avoid overlaps in cover when you hold both pubic liability and professionally indemnity insurance. For example, most public liability policies offer professional services exclusions.

However, there is a risk that in trying to avoid overlaps in coverage, you leave yourself vulnerable to gaps in your policies. 

The complexities of public liability and professional indemnity insurances, how they’re issued and any overlaps in cover can be confusing.

That’s why it’s important to get the right advice and a properly constructed policy from an experienced broker.

Test your knowledge

Now that you know a bit more about the difference between public liability and professional indemnity, let’s test your knowledge.

Are the following public liability issues or professional indemnity issues?

A. A client trips on a mat in your office and injures themselves
B. A  car is damaged when a sign post on your premises falls

C. An auctioneer accepts a bid after the fall of the hammer

D. You (or you agency) neglects act on instructions from the Body Corporate to install a non-slip mat and a visitor slips and suffers an injury
To help you decide, you must determine whether the claim arose from a breach of your professional duty as an agent (professional indemnity) or because you breached your duty as an occupier of the common property (public liability).

Want more?

(Answers: A: Public liability B: Public liability C: Professional indemnity D: Professional indemnity)

Disclaimer: Information in this article is of a general nature and does not take into account the needs of the audience. Readers should consider relevant Policy Wordings and their objectives, financial situation or needs before acting on the information provided.