The difference between public liability and indemnity insurance comes down to what was lost. Public liability answers when a person was hurt or property was damaged. Professional indemnity answers when the only thing lost was money, and the money was lost because your work was wrong.
The test
Was there physical injury or damage to somebody else's property. If yes, public liability. If the loss is purely financial and flowed from your advice, design or work, professional indemnity. Almost every real case resolves on that single question.
Three examples
A client trips over your cable: public liability. A report with an error that cost the client a contract: professional indemnity. A negligently specified installation that then flooded a floor: both, because the design failure is one and the water damage is the other.
They also respond differently
Public liability answers for events during the policy period. Professional indemnity answers for claims first made during it, whenever the work was done. That is why one can lapse when the activity stops and the other cannot.
Why clients name both
Because either alone leaves a gap on the side the client is most exposed to. A consultant with only public liability has no cover for the advice; a designer with only professional indemnity has none for the visit. Contracts name both for that reason rather than out of caution.
What to do when a contract names only one
Read what the client is actually protecting against before accepting the wording. A construction client naming only public liability may still expect design cover if you are designing anything; an advisory client naming only indemnity may still expect you to be insured for visiting their premises. Asking which risks they had in mind takes one email and settles the specification for the whole engagement.
Questions people ask about difference between public liability and indemnity insurance
What is the simplest difference?
Public liability covers physical injury and property damage; professional indemnity covers pure financial loss from your work.
Can one incident involve both?
Yes, where a design or advice failure also caused damage or injury. One insurer holding both avoids an argument between them.
Do I need both?
Most businesses do, and most client contracts name both.