Professional indemnity or public liability: which claim does each one answer?

Professional indemnity answers a client's claim that your advice or work cost them money. Public liability answers a claim that your premises or work hurt a member of the public or damaged their property. The first is about financial loss, the second about bodily injury and physical damage. They are separate covers with separate wording.

What does professional indemnity answer?

Professional indemnity, also called professional liability, is for claims by people who relied on your expertise. The hub describes it as cover that pays the legal costs and any damages when a client claims your advice, design or service caused them a financial loss.

The common thread is the type of loss. Nobody is injured and nothing is physically broken. The client says they lost money because you got something wrong: a figure, a drawing, a recommendation, a deadline or a line of code.

See what professional liability cover pays for for the detail, including claims-made wording and retroactive dates.

What does public liability answer?

Public liability is for claims by members of the public. The hub describes it as cover that pays the legal costs and damages when a member of the public is injured, or their property damaged, because of your premises or the work your business does.

The thread here is physical: a customer slips in your shop, a tool is dropped on a client's car, a contractor floods a neighbour's room. See what public liability cover pays for.

What is the difference in one view?

• Professional indemnity. The claimant is a client or someone who relied on your work. The loss is financial. The trigger is an error, an omission or bad advice. A report with a wrong figure is an example.
• Public liability. The claimant is a member of the public. The loss is injury or damage to property. The trigger is an accident on your premises or while you work. A customer who trips on a wet floor is an example.

The hub gives the same example in words: a consultant whose visitor trips in the office needs the second cover, and a consultant whose report was wrong needs the first.

Where do the two blur?

Real events do not always sort neatly. A builder who gets the plans wrong may cause both a financial loss and physical damage. A therapist who gives wrong guidance may cause a client a loss that is hard to label. The policy wording decides which section responds, and sometimes it responds to part of a claim and not the rest.

Two points help:

• Read the definitions. The words "professional services", "bodily injury", "property damage" and "financial loss" may have specific meanings in your wording.
• Read the exclusions in both sections. A public liability wording may exclude claims arising from professional advice, and a professional indemnity wording may exclude bodily injury.

Do not assume that having one means you are protected for the other, and do not assume a contract clause for one is met by the other. Ask the provider in writing which section would respond to your most likely types of claim.

What about my own staff?

Staff injuries are a third question altogether.

Neither cover is the place where an employee's injury at work is dealt with. Section 35(1) of the Compensation for Occupational Injuries and Diseases Act 130 of 1993 says that no action lies by an employee, or by a dependant of an employee, against the employer for damages for an occupational injury or disease resulting in disablement or death, and that no liability for compensation arises for the employer except under that Act. The hub makes the same practical point: injuries to employees at work fall under the Compensation Fund, and public liability is for people who are not your staff.

What do contracts mean when they ask for "liability cover"?

A lease, a tender or a client contract may ask for a kind of insurance. The hub says many contracts require cover, which is why the request form asks whether a contract demands it. Do three things:

1. Copy the clause exactly. The kind of cover, any minimum limit and any named party are all in the words.
2. Ask the other side what they mean if the wording is general.
3. Give the exact clause to the licensed provider who calls you.

Olvian does not tell you which cover to buy or what limit to hold. The provider who calls, and the other party to your contract, are the right people to settle that.

What do the Rules say about the wording?

Rule 11.3.1 of the Policyholder Protection Rules (Short-term Insurance), 2017 requires any communication from an insurer to a policyholder about a policy to be in plain language and not misleading. Rule 11.1 treats any limit on the amount of cover as a "significant exclusion or limitation", and Rule 11.3.4 requires the information given to help a policyholder understand the policy's features and whether it meets their requirements. If the wording of a liability section is hard to follow, you are entitled to ask for it to be explained, and to ask for the explanation in writing.

How should I describe my work to the provider?

Describe what you actually do, not only your job title. The two covers are priced and worded around activities, so an accurate description helps the provider place you correctly. Useful details include:

• whether clients visit your premises or you visit theirs;
• whether you give advice, produce designs or reports, or handle clients' money or goods;
• whether you work on other people's property, and with what equipment;
• whether you subcontract any of the work, and to whom; and
• the contracts that name any insurance you must hold.

If the answers change during the year, for example you start site work or take on a subcontractor, tell the provider in writing. What insurers ask a small business explains why this matters when a claim is assessed.

What happens if a claim could fall under either?

The insurer decides which section responds, in the first instance. If it repudiates or disputes the claim, Rule 17.6.2 of the Policyholder Protection Rules requires written notice within 10 days of the decision, and Rule 17.6.3 requires reasons in enough detail for you to dispute them, together with at least 90 days to make representations and details of the internal review and the ombud. Keep every communication. Business insurance claims and complaints sets out the process, including the time limits you must watch.

How does Olvian fit in?

Olvian is a lead-referral service. You ask once, and the request goes to licensed providers who pay Olvian a fee and call you back. Olvian is not an insurer, broker or adviser. It does not recommend what or how much to buy, and it does not say whether you need professional indemnity, public liability, both or neither.

Sources

Checked on 31 October 2026. This guide is information, not advice.

• Compensation for Occupational Injuries and Diseases Act 130 of 1993, section 35
• Policyholder Protection Rules (Short-term Insurance), 2017, Rule 11: Disclosure
• Rule 17: Claims management