Professional Indemnity Insurance vs. Public Liability: What’s the Difference

Key Takeaways

• Public Liability Insurance covers injuries or property damage caused by your work
• Professional Indemnity Insurance protects against financial losses due to your advice or design
• These policies protect against completely different risks and are not interchangeable
• Most tradies need both to meet site, licensing, and client requirements
• You can tailor your cover to suit your trade without paying for extras you don’t need

Even the best tradies know that things can go pear-shaped on site. Whether it’s a dodgy recommendation or an innocent accident, the fallout can cost more than just your reputation; it can hit your back pocket, hard.

That’s why two of the most important insurance policies in the trade game are Public Liability (PL) and Professional Indemnity (PI). They sound similar, but they cover very different types of risk. If you’re not across the difference between Professional Indemnity vs Public Liability, or you’re not sure whether you need one or both, this guide will set things straight.

What is Public Liability insurance?

Public Liability insurance is the first cover most tradies take out, and for good reason. It protects you when your work accidentally causes injury or damage.

Imagine this:

• A visitor trips over your extension lead and breaks a wrist
• You crack tiles during a bathroom reno
• Your scaffolding clips the neighbour’s car

It’s the kind of stuff that happens when you’re working hard and moving fast. If someone else gets hurt or something gets damaged, you could be out of pocket for repairs, medical bills or even legal action.

For trades like electrical, plumbing or welding, it’s usually the price of entry. Most residential and commercial sites won’t let you on without it. You’ll often find it included as standard in tailored packages like electrician insurance or plumbing insurance.

What is professional indemnity insurance?

Professional Indemnity insurance is less about tools and more about the advice, design or documentation you provide.

Think of it this way:

Public Liability = physical risk.
Professional Indemnity = financial risk.

You might not think you ‘give advice’ but if your client follows your recommendation and loses money, you could be liable.

Some examples:

• You suggest using a cheaper product and it fails
• You approve a drawing with incorrect specs
• Your design causes the client to re-do work later

Even casual guidance can land you in hot water. That’s why builders, carpenters, anyone quoting from plans or overseeing jobs often need PI cover, even if they don’t realise it.If you’re in trades like structural steel erection, mining, or managing heavy plant machinery, the paper trail matters just as much as the site work. Getting your PI cover sorted gives you a safety net when jobs get more complex.

Public Liability vs. Professional Indemnity Side by Side

Understanding the difference between Professional Indemnity vs Public Liability helps you see how they work together, and how to work out which combination will work best for you.

Real risks. Real protection.

Ash – Arborist, VIC

Ash was removing branches during a backyard clean-up when a heavy limb swung unexpectedly and damaged the client’s fence. It was an easy mistake that could’ve cost him thousands in repairs and legal fees. Thankfully, his arborist insurance included Public Liability cover, which paid for the damage and kept his reputation intact.

Dave – Earthmoving & Excavation, WA

Dave’s crew hit a live service line while digging on a commercial site. They’d been working off outdated plans supplied by the client. His earthmoving insurance included Professional Indemnity, which stepped in to cover the costly damage caused by the misinterpreted documentation.

Tamara – Boilermaker, SA

Tamara suggested swapping a structural plate for a thinner one to save weight. When that section later failed under pressure, the client came back with a hefty claim. Her boilermaker insurance package included Professional Indemnity cover, which took care of the losses and protected her reputation.

Nate – Roofer, NSWNate was halfway through a re-roof when a slipped tile cracked a client’s skylight. It was an easy mistake that could’ve cost him thousands in repairs. Thankfully, his roofing insurance included Public Liability cover, which paid for the damage and kept the job on track.

Do you actually need both?

Yes, in most cases.

These aren’t interchangeable policies. One protects you when things go wrong physically. The other protects you when things go wrong on paper.

If you’re on-site and also quoting, designing or supervising, having just one policy leaves you exposed.

Think of it like this:

You might win a contract because you have Public Liability, but if your role includes reviewing plans and something goes wrong, that policy won’t cover you. PI and PL work side-by-side to protect both your physical work and professional judgment.

What should you do next?

Start by looking at your day-to-day. Are you on-site and exposed to trip hazards, tools and property damage? Do you ever sign off on plans, offer advice, or quote on custom specs?

If you’re ticking both boxes, chances are you need both Public Liability and Professional Indemnity. Having just one is like locking your front door but leaving the windows wide open.

And remember: it’s not just about risk. Having the right cover in place can give you a competitive edge. Clients, councils and head contractors often prefer working with fully insured tradies, it shows you’re serious and prepared.

Cover all your bases with the right insurance policy

Whether you’re working on-site, reviewing plans, or quoting complex jobs, having the right insurance in place makes all the difference. One policy won’t cover it all, but the right combination will.

At All Trades Cover, we specialise in insurance for tradies. We’ll help you understand what you need, what you don’t, and how to structure your cover so you’re protected from every angle, without paying for extras that don’t apply to your work.Still weighing up whether Professional Indemnity vs Public Liability are right for you? Let’s walk through it together. Get tailored advice, trade-specific solutions, and cover that holds up when it matters.

Frequently asked questions

1. Can I claim under both Public Liability and Professional Indemnity for the same incident?

In rare cases, yes, but it usually depends on what caused the issue. For example, damage caused during a job might seem like a Public Liability claim, but if it was due to bad advice or design, it may fall under Professional Indemnity instead.

2. Will I be covered for past work?

Professional Indemnity works on a ‘claims-made’ basis, meaning it only covers claims made while your policy is active, even if the work was done earlier. Public Liability generally covers incidents that happen during the policy period. Always check for gaps if you’re changing insurers.

3.  What if I work across different trades?

Your policy can be structured to cover multiple roles. Whether you’re a builder who also welds, an electrician doing excavation work, or a landscaper offering both design and installation, your cover can be tailored to suit. 

For example, combining both Public Liability and Professional Indemnity under your landscaping insurance can ensure you’re protected no matter how your work changes from job to job.

4. How much Public Liability or Professional Indemnity cover do I need?

Cover amounts depend on your trade, job size and contract requirements. Many sites require $10 million in Public Liability. Professional Indemnity limits vary based on how much advice or design work you do. A broker can help tailor the right level.

5. Are subcontractors covered under my policy?

Generally not. Most policies only cover your business and employees. Subcontractors usually need their own insurance, and if they don’t have it, you could be liable.