Public Indemnity Insurance: What It Means in Australia

Public indemnity insurance is not a standard policy name in Australia, so it is not quite the same as public liability. People who use the term usually mean one of two covers.

Public liability insurance is designed to cover claims if someone is injured or their property is damaged in connection with your business. Professional indemnity insurance is designed to cover claims that your advice, service or work caused a client financial loss.

Which one a client, landlord or council means depends on the kind of harm they are worried about. Cover depends on the policy and insurer you choose. Check the policy wording and its terms and conditions for what is and isn't included.

At a glance

• Public liability insurance: injury to a person or damage to their property, such as a customer tripping over your equipment.
• Professional indemnity insurance: financial loss to a client from your advice, service or work, such as a costly error in a report.
• "Public indemnity": an informal blend of the two names. The other party can confirm which cover and limit they mean.

Why do people search for public indemnity insurance?

The phrase joins the first word of "public liability" to the last word of "professional indemnity". Both are liability covers, and both are often shortened to two letters (PL and PI), so the names blur together.

In liability insurance, indemnity means the insurer may pay for a loss you are legally liable for, subject to the policy terms. The government's business.gov.au insurance guide lists public liability and professional indemnity as separate types of business insurance.

When a contract, booking form or lease asks for "public indemnity", the writer usually means public liability. Some mean professional indemnity, and some want both.

Which cover do you mean by public indemnity insurance?

The cover people usually mean depends on what could go wrong in your work. Find the situation closest to yours.

The table shows common patterns, not rules. If a contract or licence names a cover and a limit, that sets the minimum requirement. An upcover representative or a broker can talk through what those limits mean for your business.

What does public liability insurance cover?

Public liability claims involve injury to another person or damage to their property. A customer slipping in your shop or a tradesperson damaging a client's floor are typical examples. A public liability policy may pay legal defence costs, compensation and any settlement, subject to the policy terms, conditions and exclusions.

Products liability is designed to cover claims for injury or damage caused by a product you made, sold or supplied. It applies once the product has left your hands, and is usually bundled with public liability as public and products liability.

Public liability is generally occurrence-based. The policy in force when the incident happened may respond, even if the claim arrives later. For more detail, see what is public liability insurance.

When is public liability insurance required?

Some states and territories require public liability insurance for certain occupations, according to business.gov.au. In Queensland, an electrical contractor's policy must include public and products liability of at least $5 million and consumer protection insurance of at least $50,000. The requirement sits in section 165 of the Electrical Safety Regulation 2026, as set out by WorkSafe Queensland.

Outside a licence condition, clients, landlords, councils and venues may set their own insurance conditions before work or a booking starts.

What does professional indemnity insurance cover?

Professional indemnity claims involve money rather than injury. A professional indemnity policy may include legal defence costs, compensation and any settlement you are legally liable to pay, subject to the policy terms.

Professional indemnity claims generally involve an allegation such as negligence, and any financial loss that may have arisen from this. Refunds or the cost of redoing your own work are commonly excluded.

Consultants, designers, bookkeepers, IT contractors and coaches commonly arrange professional indemnity. For more detail, see the professional indemnity insurance guide.

How does a professional indemnity claim fall within a policy?

Professional indemnity is generally a claims made policy, meaning that a claim falls within the period of insurance when it's brought against you as a letter of demand or writ or civil suit, not when the services were originally provided. So it's important to keep your cover active and continuously in place (continuity of cover).

This then means that the retroactive date should cover you for services as long as you have been providing them. You can enquire with your broker or the upcover team about how you can also get an 'unlimited' retroactive date.

If you're concerned about a particular customer service or experience, you can always consider telling your insurer as soon as you become aware of an incident, complaint or circumstance that could lead to a claim. Importantly, this doesn't impact your premiums or cost of insurance until a claim arises, and it means that any future claim is triggered from the original date you notified the insurer, so it helps spread the risk of claims across policy periods too.

You don't need to wait for a formal demand. Also keep in mind that notifying of a claim late may affect your claim.

When is professional indemnity insurance required?

Professional indemnity insurance is mandatory for some professions, according to the same business.gov.au guide. For example, registered tax agents and fee-charging BAS agents must maintain professional indemnity insurance that meets the Tax Practitioners Board's requirements. Professional bodies and client contracts may set their own minimum requirement.

Do sole traders need public indemnity insurance?

Public liability and professional indemnity insurance are not general legal requirements for sole traders in Australia. Licences, clients, landlords and councils may still set their own insurance conditions, such as the Queensland electrical contractor licence above.

When a sole trader is asked for public indemnity, the work itself usually shows which cover is meant. The public liability insurance for sole traders guide covers the public liability side in more depth.

Sole traders who work with the public

Cleaners, tradespeople, market stallholders, mobile hairdressers and personal trainers deal with people and property each day. If a client or venue asks one of these sole traders for public indemnity, public liability is usually what they mean.

Sole traders who give advice

Bookkeepers, consultants, copywriters and web developers mainly risk causing a client financial loss. If a client contract for this work asks for public indemnity, professional indemnity is often what it means.

Sole traders who do both

Some sole traders visit clients and also advise them, such as a building designer or an IT contractor working on site. They may be asked for both covers. The sole trader business insurance guide explains other covers sole traders commonly consider.

Sole traders who take on workers

Workers compensation insurance is required where workers fall within the relevant state or territory scheme, as Safe Work Australia explains. A sole trader who takes on staff can check whether those workers fall within that scheme. Neither public liability nor professional indemnity is designed to cover injury to your own workers.

Can you hold public liability and professional indemnity together?

Many businesses hold both covers, either as two policies or as one combined policy. A combined policy includes professional indemnity and public liability, helping you avoid the cost of obtaining separate policies. Whether the combined policy also includes products liability varies between policy wordings, so always check with your broker or the team at upcover.

Businesses commonly pair the two because, while they may respond to different types of insurance, they may arise in the same or related claim. Whether professional indemnity, public liability or both respond depends on what the client alleges, the policy wording and the insurer's assessment.

For a side-by-side view, see professional indemnity vs public liability insurance.

What do public liability and professional indemnity not cover?

Public liability and professional indemnity policies each carry exclusions, and some claims fall outside both. Exclusions commonly include, but are not limited to:

• injury to your own workers
• your own injury or illness
• loss or damage to your own tools, equipment or premises
• refunds, or the cost of redoing, correcting or improving your own work
• claims and circumstances you knew about before the policy started
• liability you take on under a contract that would not otherwise exist under the law
• dishonest, fraudulent or criminal acts by you (dishonesty by an employee may sit under a fidelity or crime section, designed to cover losses from employee dishonesty, where the policy includes one)
• fines and penalties that cannot be insured at law
• cyber incidents and data breaches, which generally sit with cyber insurance, designed to cover costs after a data breach or cyber attack

Important: This list is not exhaustive. Exclusions vary between insurers. Always refer to the policy wording and its terms and conditions for the exclusions that apply to you.

What affects the cost of public liability or professional indemnity?

The cost of either cover depends on the business and the cover chosen. Factors commonly include:

• your occupation and the activities listed on your policy
• turnover and the number of people working in the business
• where you work, such as client sites, public spaces or your own premises
• claims history
• the specified limit and excess you choose
• whether you combine covers or add products liability

For more detail, see public liability insurance cost in Australia and professional indemnity insurance cost.

How upcover can help

upcover arranges public and products liability insurance and professional indemnity insurance for Australian businesses and sole traders. upcover works with 80+ insurance partners and can arrange quotes from a range of insurers.

• 70,000+ businesses covered
• 4.9/5 customer rating
• Certificate of currency available once your policy is confirmed

You can request a public liability insurance quote or a professional indemnity insurance quote online.

Frequently asked questions

What is public indemnity insurance?

Public indemnity is an informal name, not a standard policy type. People using it usually mean public liability insurance, for claims about injury or property damage. Some mean professional indemnity insurance, for claims about financial loss from advice or work.

Is public indemnity the same as professional indemnity?

Professional indemnity is a distinct cover for financial loss a client says your advice, service or work caused. "Public indemnity" sometimes means professional indemnity, so the client or contract can confirm which cover they want.

Is public indemnity insurance compulsory in Australia?

Public liability and professional indemnity are not general legal requirements for every business. Some licences and professions set them, such as Queensland electrical contractors for public and products liability of at least $5 million. Registered tax agents and fee-charging BAS agents must meet Tax Practitioners Board professional indemnity requirements.

Does public liability insurance cover financial loss from advice?

Financial loss a client says your advice caused generally sits with professional indemnity insurance, not public liability insurance. Public liability is designed for injury and property damage claims, subject to the policy terms.

Does professional indemnity insurance cover injury?

Injury from an accident connected with your business generally sits with public liability insurance. Professional indemnity insurance is designed for claims that your advice, service or work caused a client financial loss.

What does a contract mean when it asks for public indemnity insurance?

A contract that asks for public indemnity usually means public liability, but it may mean professional indemnity or both. Many businesses ask the client to confirm the cover and limit before arranging a policy or sending a certificate of currency.

‍

_{The information in this article is general information only and does not take into account your objectives, financial situation or needs. Licence conditions and professional registration requirements are set by state and territory regulators and professional bodies and can change, so check with the relevant body for current requirements. Before deciding whether a product is right for you, read the policy wording and its terms and conditions. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.}