Differences between liability insurance and professional indemnity insurance
If you own a car marketing business, it is wise to have liability insurance. In addition to liability, you may also need professional indemnity insurance. Both cover requirements, but the type of areas it includes can vary widely.
The insurance you need depends on the type of car dealer you drive – you may even need both insurances.
Here are the most important facts you need to know to explain the difference between liability insurance and professional indemnity insurance.
What does professional indemnity insurance cover?
Professional indemnity insurance can cover your business for claims from a client if you make a mistake in your work. For many car companies, this may already be covered by product liability.
When selling cars, the customer is dependent on specialized knowledge. If you give the wrong advice, you could be held liable for financial losses as a result of your actions.
An IP policy covers the costs of defending you – whether the claim is valid or not.
What does liability insurance cover?
Liability insurance covers damage claims if you are sued by a member of the public for property or personal injury while you are in your business premises or working at home, in the office or in the commercial property. For example, if you do not put up a sign and someone slips on a freshly made floor in the showroom and breaks an arm, or if you accidentally drop a cup of coffee on your laptop and need to be repaired or replaced.
Liability insurance can cover your business for:
- Claim for compensation
- Claim for compensation for property damage
- Legal costs related to claims for compensation
Liability insurance is specifically designed to cover the needs of all aspects of your business, and can be purchased as a stand-alone insurance or as part of your commercial or car risk package.
In addition to public liability, two other main areas are also recommended when working in the automotive industry: employer liability insurance and product liability insurance (also known as sales and service compensation insurance).