Public liability and indemnity insurance are asked for together because between them they cover the two ways a business can cost somebody else money: by hurting them or damaging their property, and by getting the work wrong. A client asking for both is not being thorough for its own sake; it is closing the gap that either one alone leaves open.
The two halves
Public liability answers for injury to third parties and damage to their property arising from your business. Professional indemnity answers for pure financial loss caused by a negligent act, error or omission in your professional work, and for the cost of defending the allegation. The line between them is physical harm against money lost.
Why one alone leaves a gap
A consultant with only public liability is covered for the client who trips in their office and not for the advice that cost the client a contract. A builder with only public liability is covered for the scaffolding that fell and not for the design they also provided. Clients who have been on the wrong side of that gap write both into their contracts.
Buying them together
Most insurers sell both as sections of one business policy, which is simpler and usually cheaper than two policies and much simpler at claim time, because a single incident can touch both. Where they are held separately, tell each insurer about the other so that a contribution argument does not delay the claim.
The difference in how they respond
Public liability responds to events occurring during the policy period. Professional indemnity responds to claims first made during it, whatever year the work was done. That asymmetry is why professional indemnity must be kept continuous and why letting it lapse after a project ends is the most common expensive mistake with this pair.
Questions people ask about public liability and indemnity insurance
Why do clients ask for both?
Because each alone leaves a gap: public liability does not answer for bad advice, and professional indemnity does not answer for physical injury or damage.
Can I buy them on one policy?
Usually yes, as sections of one business policy. It is generally cheaper and much simpler when a single incident touches both.
Which one do I need if I only give advice?
Professional indemnity above all, plus public liability if you ever visit a client or they visit you, which most advisers do.
What happens if I let one lapse?
Public liability can lapse once the activity stops. Professional indemnity should not, because it is claims made and completed work stays exposed.