Difference Between Public Liability, Product Liability and Professional Indemnity Insurance

Business liability insurance is tailored to protect your business against the cost of litigation and claims resulted from third party damages or bodily injuries caused due to negligence of your business. With respect to liabilities that a business can face, there are three main types of business liability insurances - public liability insurance, product liability insurance and professional indemnity insurance.

The above mentioned business insurance types differ from one another, but have their own importance in protecting the business from liabilities. Hence, it is very important for businesses to safeguard their investment and consider the three policies based on the type and need of their business. Before deciding on what to take, understand the differences between them.

Public liability insurance
Public liability insurance protects the insured against the third party claims that are likely to be raised due to damage to property, bodily injury or death occurred because of operation of the business.

Public liability insurance covers expenses involved in litigation. If your business happens to be the one involving a lot of customers coming to your business premises, then you should consider taking this insurance. For instance, if a customer who visits your premises, unfortunately trips and falls at your premises and gets injured, then you will be legally liable to pay him the cost of his medical expenses. Public liability will cover these costs. Thus, it is very important for your business to be covered under this policy.

Product liability insurance
Product liability insurance is associated with liability resulted due to bodily injury or loss that occurred from the use of a product (defective) you sold. Thus, if your business is associated with manufacturing, supplying or selling of products, you should consider taking product liability insurance to stay protected against financial claims. For example, if a toy manufactured by your company is defective and causes harm or injury to your customer, then he can claim compensation for the loss. This insurance compensates for both legal expenses as well as medical expenses incurred by the insured.

Product liability is only applicable for products that are manufactured or sold, and not for services. Liabilities arising from services are covered by professional indemnity insurance.

Professional indemnity insurance
Professional indemnity insurance is a compulsory coverage (in many countries) for professionals like lawyers, doctors, engineers, accountants, architects, insurance brokers and financial advisers.

It covers the liabilities arising due to inadvertent negligence, errors, omissions or loss of data by employees while executing the profession. It also covers factors which are beyond the control of the insured. For instance, while processing the data of a client, a small fault made by the employee leads to loss of data. In such cases, having professional indemnity insurance bears the expenses to be incurred.

Deciding the right package of business insurance is quite hard. You should, however, see to it that you purchase insurance to cover every aspect of the risk involved in your business. The most common insurance cover includes product liability, public liability and professional indemnity insurance. All three policies are different from each other, but they are intended to protect your business from different risks of claims and liabilities. Hence, ensure that you have proper cover for your business against possible liabilities.

Keystone Insurance Group is Ireland's premier supplier of public liability insurance and business insurance solutions to Irish industry. Our experienced and professional team quickly arranges quotes for all classes of business insurance.

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Professional Indemnity Insurance - What Makes It Beneficial for Professional Businesses

Any business that offers professional services or gives advice should consider taking professional indemnity insurance (PII). Any faulty advice or service provided can make the business legally liable to the claims made by the client/sufferer. In such cases, professional indemnity insurance helps the business handle all the legal costs that arise from the claims made by the clients.

Some of the professions which need to take professional indemnity insurance are - medical professionals, building/maintenance contractors, financial consultants, advertising and PR agencies, designers, etc. For some of the professionals, professional indemnity insurance is made mandatory by UK government so as to get their professional authorization. They include accountants, architects, solicitors, mortgage intermediaries, insurance brokers and financial advisers.

The insurance protects the professional business against liability coming up apparently due to negligence, error or omission, loss of data or information, violation of confidentiality, employees dishonesty, etc., which may affect the business's reputation and financial stability badly.

Benefits of taking this policy
As an individual professional/a professional business owner, it is important to protect yourself from legal liabilities while executing your profession because, loss due to any kind of errors or negligence on part of yourself/your employees, may prove to be costly.

• Ensures smooth run of the business
Professional indemnity insurance protects you by covering the expenses involved in the whole process and by providing legal aid so that you run your business smoothly. The rightly timed assistance provided by this insurance policy will not let you stop your business at the time of crisis, thus, ensuring smooth running of your business.

• Covers the risks associated with employee negligence
Your employee may delete or lose some crucial information related to your client accidentally while at work. This may lead to the client to bring lawsuit against you. Having PII, you can be rest assured, as this policy also offers cover to the damage caused by your employees' negligence.

• Saves from financial losses during lawsuits
Lawsuits sometimes can lead into thousands of dollars, which can be a huge burden for you. Sometimes, you will have to bear the expenses of litigation as well the indemnity to be paid to the client. Having the PII insurance would rule out these financial problems and thus, saves you from the financial losses.

• Offers support from expert attorneys
The advantage of this insurance is that it offers support from expert attorneys. As a professional business, you cannot tackle the enormous loss of time and the intricacies involved in the litigation. This needs an expert legal adviser to do the job. PII insurance in this matter would be a great help to you.

Approach a reputable brokerage firm while choosing this insurance
There are many things you need to consider while choosing professional indemnity insurance. Some of them include: premium calculation method, the risks involved in your business, the nature of business activity or the potential indemnity, etc. You should also check for the statutory authority and reputation of the insurance company.

It is always advised to take help of a reputable insurance brokerage firm while choosing this insurance. This should be so because these firms deal with several firms' insurance products. They are well aware of the market. They would advise you the most appropriate amount of cover for your business.

Keystone Insurance Group is Ireland's premier supplier of public liability insurance and business insurance solutions to Irish industry. Our experienced and professional team quickly arranges quotes for all classes of business insurance.

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Professional Indemnity Insurance - Why Is It Necessary for Professional Service Providers?

Professional Indemnity (PI) insurance is associated with providing protection for professionals who sell their skill or knowledge. At times, in course of professional work, errors are prone to occur which attract a liability. PI insurance is meant to protect you against such liabilities.

Professionals like architects, chartered accountants, software consultants and the like are at risk. Some of the causes which can lead to liability are inadvertent disclosure/loss of data, malfeasance, infringement of copy rights and professional negligence. Howsoever expert you are in the area of specialization, you are at risk because of the reasons just stated. It is for this reason that you, as a professional, should buy PI insurance of appropriate cover.

Things covered under the policy
• Professional negligence: PI insurance offers you protection against law suits because of your professional negligence which entails some loss to your client. It covers problems arising from accidental mistakes, which are not within the purview of your personal control; say, your employee inadvertently deletes data from the database while in course of work, which leads to the loss of crucial data. The insurance provides the needed financial indemnity that ensues in the event of a legal liability.

• Circumstances unforeseen: Many of the faults that take place are not done by the professional intentionally. They are very much unexpected, but may lead to huge financial loss. As one is not prepared to face this unforeseen financial burden, having professional indemnity insurance can be of great help.

Apart from the financial compensation that you have to pay in case of litigation, professional indemnity insurance will also take care of precautionary advice which you, as a professional, deserve. These differ widely across professions. It will point to the remotest possible error on your part that may cause you to suffer a lawsuit.

• Lawsuits with malicious intent: At times, businesses or people with a malicious intent might drop you in trouble by suing you. In such cases, you can neither ignore the severity of the case, nor do you have the competency given the manoeuvring tactics at court of law. PI insurance would play the role of a lifebuoy at such predicament.

Who needs PI insurance?
PI insurance is meant for professionals who offer their knowledge, experience or skills as a paid service. Architects, engineers, brokers, solicitor, financial advisers, accountants are a few professionals who can take advantage of PI insurance. Above all, self-employed professionals should buy it at any cost, as they are solely responsible for their profession.

The clients can sue you because of your professional negligence of any sort.

Other benefits offered by the policy
Note that the law suits raised because of negligence on your part are difficult to handle in terms of time, resources and professional expertise. Sometimes, these legal claims might be too big to pay yourself, unless you have enough financial strength. Further, it may go to the extent to bring disrepute to you as also to your profession.

PI insurance is hence advisable for you, as it covers all the accidental mistakes which are potential enough to give rise to legal suits and claims for compensation. It avoids financial crippling in case of claims, saves reputation and enables smooth run of business.

Professional indemnity insurance may prevent you from having needless strain and your business from having a debilitating effect. Buying this insurance might cost a little, but the benefits thereof are manifold which you take into account.

Keystone Insurance Group is Ireland's premier supplier of public liability insurance and business insurance solutions to Irish industry. Our experienced and professional team quickly arranges quotes for all classes of business insurance.

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