Public liability vs professional indemnity insurance
Public liability insurance covers claims that your business injured someone or damaged their property. Professional indemnity insurance covers claims that your advice or professional work caused a client a financial loss. They aren’t the same: each usually excludes what the other covers, so some businesses hold both.
The difference, side by side.
Public liability and professional indemnity respond to different kinds of claims.
| Public liability | Professional indemnity | |
|---|---|---|
| What it covers | Injury to people, or damage to their property, caused by your business’s negligence1 | A client’s loss from your advice or professional work, including mistakes and breaches of contract1 |
| A typical claim | A customer trips on your premises or a job site | A client says an error in your work cost them money |
| Often sold as | Public and products liability, which adds injury or damage caused by products you make, sell or repair2 | Its own policy, or a section of a package3, 4 |
| Which policy pays | The one in force when the injury or damage happened3, 4 | The one in force when the claim is made and reported3, 4 |
The line isn’t always clean. Professional indemnity follows the work you do, so for some jobs it covers injury too: registered health practitioners’ cover must reach all aspects of their practice, and NSW real estate agents’ compulsory cover must include personal injury5, 9.
What each one doesn’t cover.
Each policy usually leaves out what the other one covers.
- Public liability The CGU, Allianz and Vero wordings we read all exclude claims for “the rendering of or failure to render professional advice or service”3, 4, 10.
- Professional indemnity Wordings differ on injury and property damage. One excludes them unless they result directly from your professional work11. Others only exclude injury to your own staff3, 4.
- Your own employees Neither covers staff injured at work. That’s workers’ compensation, which employers get from an authorised insurer. It doesn’t cover sole traders themselves1.
- Claims after you stop Professional indemnity only covers claims made while a policy is in force, so a claim after you close or retire needs run-off cover. CGU lets a business that closes or is sold apply for up to 84 months3.
Which one would respond?
Everyday examples, and two court cases where a claim fell between the covers. What’s covered always depends on the policy wording.
| What happened | Usually |
|---|---|
| An accountant’s error leaves a client with a tax penalty | Professional indemnity |
| A client trips on a cable in the accountant’s office | Public liability |
| An engineer’s design error means costly rework | Professional indemnity |
| A tradie’s ladder falls onto a client’s car | Public liability |
| A café customer is hurt by something in their food | Products liability |
- Building inspector, 2018A pre-purchase report missed a faulty balustrade, and a child later fell from the balcony. The insurer, which had issued both policies, refused cover under each. The NSW Court of Appeal held the public liability policy had to respond12.
- Dam operator, 2022After Queensland’s 2011 floods, a class action alleged SunWater mismanaged two dams. The court let its liability insurers rely on the professional services exclusion, even though the damage was physical, and noted cover remained under the professional indemnity part13.
What they cost.
Professional indemnity costs more in every industry upcover reports. Published figures: a guide, not a quote.
All businesses, from 2,000+ policies. upcover, August 2026.6
All businesses. upcover, September 2026.7
Average premium in 2021, businesses of all sizes. APRA.8
Average premium in 2021, businesses of all sizes. APRA.8
For professional services businesses, upcover’s typical premiums are about $568 a year for public liability and $1,135 for professional indemnity6, 7.
Who has to hold which.
No law requires every business to hold either. These are some jobs where a law, licence or regulator does.
- Tax and BAS agentsProfessional indemnity of at least $250,000 to $1 million, depending on turnover14.
- Financial advisersProfessional indemnity of at least $2 million for financial services licensees15.
- Migration agentsProfessional indemnity of at least $250,00016.
- Health practitionersProfessional indemnity for all aspects of their practice, as a condition of registration5.
- Electrical contractorsPublic liability of at least $5 million in Queensland and Victoria17, 18.
- Builders in TasmaniaPublic liability of at least $5 million to be licensed19.
Contracts often ask for both. The federal government’s digital panel asks suppliers for $2 million of professional indemnity per occurrence and $10 million of public liability20. Our consultant, IT contractor and tradie guides list more.
Common questions.
Is public liability the same as professional indemnity?
No. Public liability covers injury to people and damage to their property. Professional indemnity covers a client’s financial loss from your advice or professional work. Each usually excludes what the other covers.
Do I need both?
It depends on the work you do and your contracts. Some licences and professions require one or the other, and many contracts, such as government panels, ask for both. A broker can look at what your business does and explain your options.
Does public liability cover bad advice?
Generally not. The public liability wordings we read all exclude claims arising from professional advice or services. That’s what professional indemnity is for.
Does professional indemnity cover injuries?
It depends on the wording. Some policies exclude injury and property damage unless it results directly from your professional work. Health practitioners’ cover must extend to all aspects of their practice.
What about workers’ compensation?
Neither policy covers your own employees being injured at work. That’s workers’ compensation, which most employers must hold. It doesn’t cover sole traders themselves.
Which costs more?
Professional indemnity, in the published figures. upcover’s typical premiums are about $1,221 a year for professional indemnity and $605 for public liability.
Can I get both in one policy?
Some insurers sell them together, as separate sections of one package, such as CGU’s Combined Liability Package and Allianz’s Office Pack.
What happens to professional indemnity when I stop working?
It only covers claims made while a policy is in force, so a claim after you close or retire needs run-off cover. CGU, for example, lets a business that closes or is sold apply for up to 84 months.
Still have a question? A broker can talk it through with you.
Get matched with a brokerTalk it through with a broker.
This guide is general information. A licensed or authorised broker can look at your business and explain your options.
- Free for businesses, with no obligation
- One broker who works with businesses like yours
- No calls from multiple insurers
Get matched with the right broker in a few simple steps
Tell us about your business and we’ll match you with a broker relevant to your enquiry. You’ll only be contacted by one relevant provider.
Step 1 of 3Covers in this guide.
Our guides to what each cover generally does, what it costs and the rules that apply.
Sources.
- Types of business insurance, business.gov.au, 8 November 2024
- Public and products liability insurance vs professional indemnity, Allianz, 21 October 2025
- Combined Liability Package: professional indemnity and public and products liability (CV863 REV2), CGU, October 2025
- Office Pack PDS and Policy Document (POL963BA), Allianz, 9 April 2026
- Professional indemnity insurance arrangements, Ahpra, 9 May 2025
- How much does public liability insurance cost in Australia?, upcover, 20 August 2026
- How much does professional indemnity insurance cost in Australia?, upcover, 22 September 2026
- Review of claims trends and affordability of public liability and professional indemnity insurance, APRA, May 2023
- Professional indemnity insurance information sheet, NSW Fair Trading, June 2025
- Business Insurance PDS and Policy Wording, Vero, 4 June 2024
- Consultants Professional Indemnity Wording 11.20 v3, DUAL Australia
- Pacific International Insurance Co Ltd v Walsh [2018] NSWCA 9, NSW Caselaw, 14 February 2018
- SunWater Ltd v Liberty Mutual Insurance Co [2022] NSWCA 273, NSW Caselaw, 16 December 2022
- Professional indemnity insurance, Tax Practitioners Board, 30 April 2026
- Regulatory Guide 126: Compensation and insurance arrangements for AFS licensees, ASIC, November 2024
- Practice management duties, Office of the Migration Agents Registration Authority
- Electrical Safety Regulation 2026 (Qld), section 165, Queensland legislation, 2026
- Registered electrical contractors, Energy Safe Victoria
- Builder licence, CBOS Tasmania, 12 August 2026
- Panel Agreement for Digital Marketplace Panel 2 (version 3.0), Digital Transformation Agency, 29 September 2025