What is the difference between public liability insurance and professional indemnity insurance?

Public liability vs professional indemnity is about two different types of loss: physical injury or damage, and a client's financial loss. Many Australian businesses that give advice while also meeting clients, visiting sites or handling property commonly arrange public liability and professional indemnity insurance together.

Public liability vs professional indemnity at a glance

• Public liability insurance is designed to cover claims where your business activities cause third party injury or property damage.
• Professional indemnity insurance is designed to cover claims that your advice, service or work caused a client financial loss.
• Neither is generally designed to cover your own injury, employee injuries, your tools, cyber incidents, motor accidents or management decisions. These commonly sit with other policies.
• Products liability is designed to cover claims that a product you sold or supplied causes injury or damage. If you resell, sell or supply goods, check whether your public liability policy includes products liability.

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.

Why are professional indemnity claims made and public liability occurrence-based?

Public liability insurance is commonly occurrence based and professional indemnity insurance is generally claims made.

How does claims made cover work?

Professional indemnity is generally a claims made policy. That means a claim can occur in the period of insurance when it is brought against you. That could be a letter of demand, a writ or a civil suit.

It is not typically an 'occurrence based' policy, which is triggered by the date the services were originally provided. So it is important to keep your cover active and continuously in place (also called continuity of cover).

This then means the retroactive date on your schedule should cover you for claims brought from services for as long as you have been providing them. You can ask your insurance broker or the upcover team about how you can also get an unlimited retroactive date. Your retroactive date is the earliest date of past services the policy may respond to.

When should you tell your insurer?

If you're concerned about a particular client 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.

Claims made, occurrence-based and discovery claims are to be notified to the insurer as soon as reasonably practicable. Also keep in mind that notifying of a claim late may affect your claim.

If you've purchased a policy through upcover, you can start a claim through upcover support or by contacting our team directly on support@upcover.com or 1300 UPCOVER (1300 872 683). Admitting liability, incurring costs or agreeing to a settlement before you notify your insurer may affect your claim. Starting a claim does not confirm that your claim is covered; your insurer assesses it under the policy terms, conditions, exclusions and limits.

What is run-off cover?

Run-off cover keeps the window open for claims that might be brought against your business for past work after you retire, stop operating, sell your business or exit your industry and go back to employed work. Run-off is usually arranged for a set number of years, and the period varies between insurers. Importantly, it can typically only be arranged from your existing insurer with your current insurance policy and may be available for up to 7 years.

In allied health, some professional associations expect members to hold run-off for a period after they stop practising.

Businesses commonly discuss run-off with an upcover team member or an insurance broker before a policy is cancelled. The same applies before they exit the industry or business, rather than after.

How does occurrence-based cover work?

Occurrence-based public liability insurance generally responds based on when the incident happened at your business or from your services resulting in a third party injury or property damage. The policy in force at that time may respond, even if the claim arrives years later.

Continuity of cover, retroactive dates and run-off are generally claims made concepts.

For more, see claims made vs occurrence insurance.

Professional indemnity vs public liability: how the two policies differ

For more on public liability, see public liability versus products liability insurance and public liability insurance in Australia.

Within professional indemnity policies, covered allegations may include negligence, errors and omissions, breach of professional duty, misrepresentation and breach of confidentiality.

Professional indemnity policies may also extend to cover possible defamation claims and breaches of privacy. For many professionals, professional indemnity may respond to claims that advice or services led to a client's financial loss.

Professional indemnity may include legal defence costs, compensation and any settlement you are legally liable to pay, subject to the policy terms.

Investigation costs are commonly included in professional indemnity policies, though the specified limit for that section varies between insurers. The specified limit is the most the insurer may pay for that section. Investigation cover commonly applies to an investigation by an official body, including some associations.

For more, see what is professional indemnity insurance.

Which businesses commonly arrange public liability, professional indemnity or both?

Businesses tend to fall into a pattern set by two questions. Do you give advice clients rely on, and do you physically interact with people, sites or property?

What applies to your business depends on your occupation, contracts, professional body requirements, any regulatory requirements and the policy wording available to you.

Which professions have cover set by regulation?

Where professional indemnity is set by regulation, the requirement comes from a named body:

• Registered tax and BAS agents must hold professional indemnity insurance that meets Tax Practitioners Board requirements.
• AHPRA-registered health practitioners must have professional indemnity insurance arrangements that meet their Board's registration standard. That standard may be met by an employer's arrangement rather than an individual policy, but it is important to check with your employer if you are not sure.
• Australian financial services licensees serving retail clients must have compensation arrangements in place under the Corporations Act. ASIC Regulatory Guide 126 sets out how professional indemnity insurance is used to meet that obligation.
• State registration bodies may also set professional indemnity requirements for some professions, and these vary by state. For example, practising architects in Victoria must be covered by professional indemnity insurance, as set out by the Architects Registration Board of Victoria.

This list is not exhaustive. For allied health, see our guide to public liability vs professional indemnity for allied health professionals.

When is public liability or professional indemnity arranged on its own?

Public liability insurance alone is commonly arranged where the main risk is third party injury or property damage, not advice. Professional indemnity insurance alone is commonly arranged where the main risk is an advice or service error and physical contact is limited.

Exposures may change as a business grows. A remote bookkeeper who starts visiting client offices may pick up a public liability exposure that was not there before. An upcover team member or an insurance broker can talk through where your business sits.

Can you get public liability and professional indemnity in one policy?

Public liability vs professional indemnity is not always an either/or choice. Some businesses arrange them separately, and others may be able to get both in one package, depending on the occupation and the insurer.

Allied health practitioners, care and support workers, consultants and IT professionals commonly get quotes for both together. Not every occupation can access bundled cover, so check what options apply to yours.

Arranging both in one package may mean one renewal date and one point of contact. It may also reduce the risk of a gap between two policies.

Can multiple insurance policies or cover sections in public liability or professional indemnity apply to the same event?

When a claim is made, the insurer's claims team typically writes to you and your insurance broker to identify the sections of the policies that may respond, and which policy may be triggered. It may be important for you to consider which option is more beneficial, such as a smaller excess or a higher limit of liability.

Where your policies sit with different insurers, the insurers may dispute which policy responds. In some circumstances, where it is available, having several policies with one insurer may be considered useful.

Where both policies are held, an upcover team member or an insurance broker can help you understand your existing insurance and any gaps in cover that might exist.

Which policy might respond to a claim, public liability or professional indemnity?

The public liability vs professional indemnity question turns on what the claimant alleges caused the loss, the policy wording and the insurer's assessment.

Client injury during a visit

A consultant visits a client, leaves a laptop with an exposed charging cord in the walkway and the client fractures a wrist by falling over it.

How the policy may respond: Public liability insurance may respond to claims for third party injury, subject to the policy terms.

Financial loss from incorrect financial statements

An accountant prepares financial statements containing errors. The client relies on them, makes a decision and suffers a loss.

How the policy may respond: Professional indemnity may respond to claims that advice or services caused a client financial loss, subject to the policy terms.

Property damage during a site visit

An interior designer knocks over an expensive vase while inspecting a home.

How the policy may respond: Public liability insurance may respond to claims for damage to third party property, subject to the policy terms.

Advice a client says led to financial loss

A naturopath recommends a supplement program over six months. The client says the advice was inappropriate for their situation and seeks the cost of the program back, plus the cost of treatment elsewhere.

How the policy may respond: Professional indemnity may respond to claims that advice or services caused a client financial loss, including defence costs, compensation and any settlement, subject to the policy terms.

Important: These claims examples are examples only. Cover is subject to policy terms, conditions and exclusions. Policy wordings vary between insurers. Always refer to the policy wording and its terms and conditions for details. If you have questions about a particular possible claim or would like assistance about whether a certain claim might be covered it is always best to speak to an upcover team member or your insurance broker.

What do public liability and professional indemnity not cover?

Risks commonly excluded under both include, but are not limited to:

• Your own injury or illness. Personal accident and sickness insurance may help replace income if you cannot work.
• Employee injuries, which are generally handled through the relevant state or territory workers compensation scheme.
• Your tools, equipment or business property, which generally sit with tools of trade or business pack cover.
• Cyber attacks or data breaches, which generally sit with cyber insurance.
• Management or employment decisions. Management liability may respond to claims of that kind.
• Motor vehicle accidents, which generally sit with commercial motor insurance.
• Dishonest, fraudulent or criminal acts by you. Dishonesty by an employee may be covered under the crime or fidelity section of a management liability policy, designed to cover losses from employee dishonesty, where you arrange one.

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, and if you have questions you should speak to your insurance broker or the upcover team.

What should you check before arranging cover?

Three review questions can help: When was the last time I reviewed my insurance? Has my business or activities changed including revenue, employees, activities or customers? Have my requirements for licensing or contractual requirements increased or been reduced?

• Are all your services and occupations correctly listed on the policy?
• Do your contracts require public liability, professional indemnity or both, and at what limits?
• Is professional indemnity written on a claims made basis, and what retroactive date applies?
• Have you disclosed prior claims or known circumstances?
• Are subcontractors covered or excluded?
• Does your public liability policy include products liability if you sell or supply goods?
• Are cyber, IT, privacy or data risks handled separately?
• Can you get a Certificate of Currency, the document that shows your cover is active? Clients, landlords and head contractors commonly ask for one before you start.

For pricing, see professional indemnity insurance cost and public liability insurance cost.

How upcover can help

upcover arranges professional indemnity and public and products liability insurance for eligible Australian businesses. For some occupations, both may be available in one policy. upcover works with 80+ insurance partners and can arrange quotes from a range of insurers.

Before you start, have these ready: your ABN and business name, every service you deliver, your annual turnover and any limits your contracts require.

• 70,000+ businesses covered across Australia
• 4.9/5 customer rating
• 80+ insurance partners
• Certificate of Currency available once your policy is confirmed, for eligible policies

Not sure which exposures apply to your business? An upcover team member or an insurance broker can talk through your situation. You can also request a quote for professional indemnity or public and products liability, or see options for professional and business services.

Frequently asked questions

Do I need public liability and professional indemnity insurance?

It depends on the exposures your business has. Businesses that give advice or professional services, and that also interact with clients, visit sites or operate from premises, commonly arrange both.

Your contracts, professional body requirements and, for some professions, regulation may also set a minimum requirement. An upcover team member or an insurance broker can talk through which exposures apply to you.

Is professional indemnity the same as public liability?

Professional indemnity and public liability are two different products. While they may respond to different types of insurance, they may arise in the same or related claim.

The main difference between public liability insurance and professional indemnity insurance is the type of loss behind the claim. A client tripping in your office may be a public liability insurance claim. A client alleging your advice led to financial loss may be a professional indemnity insurance claim.

Does professional indemnity cover injury or property damage?

Professional indemnity is generally designed for claims that your advice or services caused a client financial loss. Public liability insurance is designed to cover claims for third party injury or property damage.

Some allied health practitioners arrange a combined policy that includes both, with each part designed to respond to a different type of claim. Whether professional indemnity, public liability or both respond depends on what the client alleges, the policy wording and the insurer's assessment.

Can I buy public liability and professional indemnity together?

Some insurers offer public liability and professional indemnity as a package, depending on your occupation. A package may mean one renewal date and one point of contact. Not every occupation can access bundled cover.

Can one claim involve both public liability and professional indemnity?

One incident may lead to a claim that involves both. For example, a design error may cause property damage and also lead to financial loss for a client. Public liability policies commonly exclude claims arising from professional advice or services provided for a fee.

Whether professional indemnity, public liability or both respond depends on what the client alleges, the policy wording and the insurer's assessment.

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_{General information only, not personal advice. It does not take into account your objectives, financial situation or needs. Which covers apply to a business depends on its occupation, contracts, professional body requirements, any regulatory requirements and policy wording. The business types table shows common patterns and who commonly asks for cover, rather than data on what businesses purchased. Claims examples are illustrative only and do not represent confirmed cover outcomes. Cover is subject to the relevant policy wording and its terms and conditions. For commercial motor vehicle insurance, also read the Product Disclosure Statement (PDS), Target Market Determination (TMD) and Financial Services Guide (FSG). Insurance information checked October 2026. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.}