Public liability versus professional indemnity

What’s the difference?

It’s an important question raised by many real estate professionals, but too often only asked when an incident or claim has already happened. To make sure that you’ve got the right cover, you need to understand the basic differences.

Public liability insurance protects your agency against claims around an incident which causes property damage or bodily injury for which your agency can be held legally liable.

One of the key triggers is your agency’s degree of physical control over the property, including its ownership or occupation. What’s most important to remember is most public liability policies exclude claims arising from a breach of professional duty.

Professional indemnity cover is designed to protect you and your agency against claims made by third parties for negligent acts, errors or omissions arising out of your business practice which causes loss or damage. Here, the key trigger is the breach of some professional duty, which does not depend on its ownership, occupation or control of property.

Third parties can range from sellers, buyers, landlords, tenants and visitors to rental properties and clients attending your office.

Not everything is black and white

Can you distinguish the public liability issues from the professional indemnity related issues?

  • A person is injured by a “for sale” sign that has been incorrectly erected, either outside your office or near a property for sale.
  • A client slips and falls on a mat in the agent’s office and is injured.
  • You’re conducting an open house and a visitor either injures themselves during the open house, or afterwards you find something has been stolen or damaged.
  • You (or your agency) fail to detect property faults, or don’t take appropriate action for maintenance requests from a tenant.


To work out if it is public liability or professional indemnity, you need to consider:

  • Is the allegation that you have breached your professional duty as an agent? If so then it is likely professional indemnity.
  • Is the allegation simply that you have breached your duty as an occupier of the common property? If so then it is likely to be public liability.


It’s important to recognise that most things, in particular insurance, are not black and white or clear cut, and it may be difficult to determine which policy will provide cover. You need to ensure that you have adequate protection for both types of insurance.

Aon’s Real Estate team has over 40 years insurance experience within the real estate sector and are happy to address your concerns.

To find out if you have the right insurance or if you would like to learn more call us on 1800 466 894.

©2016 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No. 241141
The information contained in this article about Aon Risk Services products is general in nature and should not be relied upon as advice (personal or otherwise) because your personal needs, objectives and financial situation have not been considered. So before deciding whether a particular Aon Risk Services product is right for you, please consider the relevant PDS or contact us to find out more.

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