Professional indemnity insurance is designed to respond to financial loss caused by a failure of professional skill. Public liability insurance is designed to respond to injury to people and damage to physical property. To keep the two from overlapping, PI wordings carry an exclusion of liability for bodily injury, sickness, disease or death, and for loss of or damage to tangible property.
Without the exclusion, the same event could trigger two policies, two sets of defence costs and two limits, and pricing for both would be unstable. The exclusion is a boundary marker rather than a coverage gap in itself. The gap appears only when a firm has one policy and not the other, or when the exclusion is drafted more widely than the corresponding grant in the liability policy.
A rigid exclusion would be unworkable for design professionals, because negligent design regularly causes physical damage. A structure that cracks, a system that floods a floor, a specification that leads to a fire. Better PI wordings therefore carve back the exclusion so that injury or damage caused by a negligent act, error or omission in the performance of professional services remains covered.
The precise carve-back drafting is the single most important thing to check. Some wordings preserve cover only for damage to property, not injury. Some preserve both but exclude any liability the insured has assumed under a contract. Some sit behind a defined professional services clause that is narrower than the practice's actual work. For architects and engineers the carve-back is not optional detail, it is the operative part of the cover.
Advisory work on health and safety produces the sharpest version of the problem, because the whole purpose of the service is to prevent injury and the claim will therefore always be an injury claim in form. A wording with a narrow carve-back can leave a safety practice with cover that does not respond to its core exposure. Firms operating in this space should read the exclusion, the carve-back and the professional services definition together, and the sector position for health and safety consultants should be checked against the actual services performed, including CDM duties and principal designer roles.
Hold both covers where the practice has any site presence. Compare the PI carve-back against the public liability professional services exclusion, because the two are meant to interlock and sometimes do not, leaving a strip of exposure with no home. Where the practice has both policies with different insurers, ask each to confirm in writing how they read the boundary. Where a single claim could engage both, notify both at the same time rather than choosing. Apex places the two covers together where a client wants the boundary managed as one problem rather than two.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.