Mistakes are bound to happen in construction, and it is vital for your business to have adequate insurance coverage. When protecting your construction business from legal action, there are two insurance policies that you may want to consider: professional indemnity insurance and public liability insurance. However, which is the best insurance for your business? In this article, we will delve into the specifics of professional indemnity insurance and public liability insurance, highlighting the pros and cons so you can decide which one to choose.
What is construction professional indemnity insurance?
Professional indemnity insurance is designed to protect construction companies from negligence claims or poor design service. This cover safeguards your business when offering designs or specifications, and covers costs associated with professional misconduct claims. Should any advice given by your business result in financial loss, this is the cover that can safeguard your reputation.
One of the main advantages of professional indemnity insurance is that it covers a broad range of claims that construction companies could face, including poor design, breaches of contract and professional misconduct. Having this cover in place can give you the peace of mind needed when handling a construction business.
However, this policy does not cover all claims that your construction company could face, such as those related to bodily injury. It typically excludes physical injury claims, even if the injury results from professional negligence.
What is construction public liability insurance?
Public liability insurance is designed to protect construction companies from claims made by clients or members of the public regarding injury or damage as a result of your business practices. Your policy can cover the cost of any legal fees, including compensation for the client or member of the public.
One of the biggest advantages to public liability insurance is that it can cover off-site incidents, which is particularly important for construction. As it is likely that you will be working on different premises, this can prove particularly valuable for construction companies.
However, this policy does not cover your employees. Should an employee injure themselves at work, you would need a different insurance policy to cover any claims.
Which type of insurance should you choose?
Both professional indemnity and public liability offer vital protection for construction companies against legal action. However, both insurance types have their limitations, and may not be suitable for all types of construction projects. The better insurance policy for your business will depend on the needs and risk level associated with the projects.
