Professional indemnity and liability insurance covers three separate liabilities that arrive under one heading. Professional indemnity for financial loss caused by your work. Public liability for injury and damage to third parties. Employers liability for injury to the people who work for you. Which combination you need follows from what your business actually does.
Employers liability, the compulsory one
Required by statute the moment anybody works for you rather than for themselves, to a statutory minimum limit, with a penalty charged for every day without it. It answers for injury or illness suffered by an employee arising from their work, and it is the only one of the three that a business can be fined for not holding.
Public liability, the site one
Injury to third parties and damage to their property arising from the business. Required by sites, clients and many contracts rather than by statute. The limit is driven by what a serious injury costs and by what the largest site you work on specifies.
Professional indemnity, the advice one
Pure financial loss caused by a negligent act, error or omission in professional work, plus the cost of defending it. Required by professional bodies for several professions and by contract for most corporate and public sector engagements. Written on a claims made basis, unlike the other two.
Which combination a business needs
Anybody with staff needs employers liability. Anybody whose work happens where other people are needs public liability. Anybody whose output somebody relies on needs professional indemnity. Most businesses sit in two of the three and many in all of them, which is why they are sold as sections of one policy.
Questions people ask about professional indemnity and liability insurance
What is the difference between the three?
Employers liability covers your staff, public liability covers third parties and their property, professional indemnity covers financial loss from your work.
Which is compulsory?
Only employers liability, and only if you employ anybody. The others are required by contracts and professional bodies rather than by statute.
Can I buy them on one policy?
Yes, and almost everybody does. They are sections of a standard UK business policy.
Which is claims made?
Professional indemnity. The other two respond to events during the policy period, which is why continuity matters far more on the third.