What is PI & PL Insurance?
Public Liability insurance is often spoken about in the same breath as Professional Indemnity (PI & PL) but they are separate types of insurance, though similar, and may be jointly covered. Public Liability Insurance protects against claims relating to personal injury or property damage, unrelated to usage of your motor vehicle.
Professional Indemnity is to protect business owners, freelancers and the self-employed if clients claims of negligent acts or omissions. Any organisation which provides a professional service or gives advice could be sued if the recipient is unhappy with their work.
Often PI & PL is offered as an add-on policy, like Gap insurance. As with all insurances, you should make direct comparisons on how much cover you have and if it is aggregate or shared cover (ADI NJC, DIA & MSA, for example, have a shared pot - once it’s gone, it’s gone) or exclusive to you.
Why do I need it?
It is protection against legal action. It doesn’t have to go to court, just sending a legal document to refute claims can cost £500-800 per document. Not using a legally qualified person and sending a letter yourself can put you at risk of making it worse. For example, knowing to state ‘without prejudice’ on a letter before responding can make a difference. These claims do not have to be valid or upheld to cost you money or build up legal bills.
If you are doing fleet training, instructor training, classroom training, or working with a business or training body they may request proof of your cover. Some driving schools/franchises also ask their ADIs to provide proof of cover.
Doesn’t my car insurance cover me?
It depends on the claim. Car insurance cover often only covers ‘wheels moving’ situations. Public liability may be added on to some motor insurance policies, but most are unlikely to include professional indemnity insurance. If you were to injure someone or damage property whilst away from your vehicle, a standard motor policy would not provide coverage – this would be covered under a Public Liability policy. Similarly, if a pupil came back making a claim that you didn’t teach them properly which had lead to a loss, cover would be provided under a Professional Indemnity policy, not your car insurance.
The DITC has a PI/PL provider who offers individual cover with a 15% discount for our members. We have sourced a respected provider specialising in small business insurance, and providing quotes online.
To offer our own example:
Young Driver Training Ltd started sending letters to a number of other Under 17 training providers for use of the name/phrase ’Young Driver’. This included our Young Driver Challenge scheme. Luckily we were covered by our DIA policy, and also received support from Marmalade insurance who fought their claims alongside us. It saved us in the region of £30,000, and that could have been a lot higher and even lead to bankruptcy.
Their demand was for us to cease business and uncapped damages to be agreed at a later date. They claimed to own the phrase ‘ Young Driver’ and that nobody else could use it, even in a description on their website. i.e. We train young drivers.
Because of this claim and the risk of others, we wouldn’t operate without PI & PL insurance, any more than we would motor insurance.
To help you better understand PI & PL insurance we have teamed up with Sam Cox of Qdos Contractor to bring you some frequently asked questions.
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Posted by Ian
January 20, 2021