Starting and running a business comes with its share of risks. Whether you’re serving customers face-to-face or providing professional advice, understanding the types of insurance available can help you make informed decisions about protecting your business.

Two of the most considered covers are Public Liability Insurance and Professional Indemnity Insurance. While both can help businesses manage the financial impact of claims, they serve very different purposes.


Public Liability Insurance: protection for everyday business activities

Many businesses often consider Public Liability Insurance. This is the most common type of business insurance, whether you’re a sole trader or a business owner with multiple employees.

Public Liability Insurance is designed to help protect businesses when a third party claims they have suffered injury, illness, death, or property damage as a result of the business’s activities.


For many businesses, particularly those that interact with customers, suppliers, or members of the public, this type of cover can provide valuable peace of mind.


Examples of situations that could lead to a liability claim include:

  • A customer slipping on a wet floor in a retail store and suffering an injury.

  • A poorly installed display falling and causing harm to a visitor.

  • A restaurant patron becoming ill after consuming contaminated food.

  • Property damage caused by a fire that originates from inadequately maintained equipment.

NRMA Business Insurance offers the flexibility to choose your level of Public Liability Insurance and add cover options specific to your business. For example, retailers and hairdressers might want extra cover for their shop and stock, while carpenters and plumbers may want to cover their tools and work ute.


Public Liability Insurance generally relates to claims made by third parties, such as customers, suppliers or subcontractors. It doesn’t typically cover injuries sustained by employees while at work.


What about employee injuries?

Employee injuries are generally covered under workers’ compensation schemes, which operate separately from Public Liability Insurance. Requirements differ between states and territories, and businesses should ensure they understand their obligations as an employer.


Professional Indemnity Insurance: cover for professional services and advice

While Public Liability Insurance focuses on physical injury and property damage, Professional Indemnity Insurance is designed for businesses that provide advice, expertise or professional services.

This cover can help with certain legal costs, disputes and claims that arise from an alleged error, omission or breach of professional duty while delivering a service.

Some examples include:

  • A consultant inadvertently sharing confidential client information with an unintended recipient.

  • A graphic designer facing allegations of copyright infringement relating to creative work.

  • An accountant being accused of failing to identify or disclose financial irregularities.

For businesses whose reputation relies on their professional knowledge and expertise, these types of claims can be costly and time-consuming to manage.

Professional Indemnity Insurance is commonly considered by professionals such as:

  • Designers

  • Lawyers

  • Accountants

  • IT consultants

  • Real estate agents

  • Other service-based businesses


Choosing the right cover for your business

The insurance needs of every business are different. Some forms of insurance may be legally required depending on the industry or profession, while others are optional but can provide valuable protection against unexpected claims.


Businesses that interact with the public may consider Public Liability Insurance, while those providing advice or professional services may benefit from Professional Indemnity Insurance. In some cases, a business may choose to hold both covers, depending on the nature of its operations.


Before taking out any insurance policy, it’s important to understand what is and isn’t covered. Business owners should carefully review policy documents and seek professional advice where appropriate to ensure their cover aligns with their specific risks and responsibilities.