Professional indemnity and public liability insurance for contractors

Professional indemnity and public liability insurance for contractors are named together in almost every agency contract, because a contractor works in somebody else's building and is relied on for their expertise. Each cover answers one of those two facts and neither answers the other.

Public liability, for being on site

A contractor working at a client's premises can injure somebody or damage property, and public liability answers for that. Site rules and client policies frequently specify the limit, and it is often the same figure across a whole framework regardless of what the contractor actually does.

Professional indemnity, for the work itself

The advice, the configuration, the code, the design, the report. The client's loss is financial and is the point of the engagement, which is why the professional indemnity limit is usually the larger of the two and the one clients care most about. That is why professional indemnity insurance for contractors is sized on the client's possible loss rather than on the fee. Professional indemnity insurance for electrical contractors follows the same logic where they design or certify installations. For plumbers, professional indemnity insurance becomes relevant once the work includes designing a heating or hot water system rather than only installing one.

How the limits are set

By the client's risk policy rather than by an assessment of you, which is why they can look disproportionate to a one person company. Check whether the professional indemnity limit is per claim or in the aggregate, and whether defence costs sit inside it, because those two details change what the number is worth.

Buying them together

As sections of one policy, from one insurer, is simpler and cheaper and matters at claim time because a single incident can touch both. A contractor holding them with different insurers should tell each about the other so that a contribution argument does not stall the claim.

Questions people ask about professional indemnity and public liability insurance for contractors

Why do agencies ask for both?

Because a contractor works in somebody else's space and is relied on for expertise. Public liability answers the first, professional indemnity the second.

Which limit is usually higher?

Professional indemnity, because the client's financial loss from bad work is usually larger than the physical damage a contractor can do on site.

Should I buy them on one policy?

Usually. It is cheaper, simpler and avoids two insurers arguing when one incident touches both.

Are the limits negotiable?

The contract minimum rarely is. What is negotiable is your own decision to buy above it, which is often wise.

Do builders need professional indemnity insurance?

Where they design, yes: a builder who draws up plans or takes design and build responsibility carries the design risk professional indemnity answers. A builder working strictly to somebody else's drawings is usually asked for public liability and contract works cover instead.

Professional indemnity and public liability insurance for contractors, bought as the pair agencies name