Your Buyer’s Guide to Professional Indemnity Insurance
What Is It? Professional indemnity insurance (PI) is a kind of business insurance cover that protects your business from financially damaging claims by dissatisfied clients. As today’s business environment is much more litigious than it used to be, not helped by the fact that customers are becoming more and more demanding, even the most established businesses can find themselves in a reputation-damaging dispute with a client over a mistake.
You may need professional indemnity insurance if you:
• provide advice to your clients;
• handle data belonging to a client;
• are responsible for a client’s intellectual property;
• provide a professional service and could be challenged on your work.
What Does PI Cover?
Here is just a short list of the most common reasons for disputes:
• Dishonesty: by either you or your employees or subcontractors;
• Negligent act, error or omission: demonstrated negligence while providing your service or breach of duty of care by mistake;
• Accidental infringe on intellectual property: infringing other companies’ or individuals’ copyrights, trademarks, or other rights by mistake;
• Loss of documents or data given to you by a client: damaged, lost or stolen data or documents that are a property of your clients;
• Unintentional defamation: libel and slander.
Your professional indemnity insurance will pay reasonable costs incurred in the legal defence and settlement of claims in relation to the above.
Who Needs Professional Indemnity?
Any individual or business providing professional advice or services should seriously consider taking out PI insurance. Examples include (but not limited to):
Business Advisers / Marketing Consultants / PR Consultants / IT Consultants / Graphic Designers / Web Designers / HR Consultants / Copywriters/Writers / Translators & Interpreters / Office Services/Accountants / Health & Safety Consultants
Many professions such as solicitors, architects, accountants, engineers, estate agents, IT consultants, etc. are required to have PI insurance as a regulatory requirement.
How Much Does Professional Indemnity Cost?
Professional indemnity insurance premiums may vary significantly between insurance companies. What is more relevant, though, is that it may also vary significantly between professions of the insured. In other words, a web marketing specialist and an environmental consultant will most probably pay different premiums. As a guide, premiums start as low as £165 for £100,000 of cover in a profession considered a low-risk.
Professional indemnity insurance is not requested by law but it can save you many thousands of pounds if you have it. It is worth paying the few pounds extra so that you can benefit from all features and protect yourself and your business name.
Some insurers will offer a one-size-fits -all professional indemnity cover, however most will take a more tailored approach and will quote respective of your profession.
A good and recommended option is to go for a specialist professional indemnity insurance such as Hiscox. Their quotes are tailored to your business and provide totally comprehensive cover.
Another reputable company that specialises in PI insurance is PolicyBee. Their no-fuss quoting procedure involves no forms, payment in instalments is interest free and by direct debit and premiums start as low as £6 when you buy online.
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