Professional indemnity insurance is a must for any company whose clients might suffer financial loss as a result of their activities. This is an extremely useful product, because no matter how well your company operates, mistakes and unforeseen circumstances can happen. It is intended to cover for any losses a client may suffer as a result of your advice, services or designs. It can cover professional negligence (that is, an error in your work for a client), loss of documents or data, unintended breach of confidentiality or copyright, defamation and libel and loss of goods or money which is either yours or for which you are responsible.
PI can be added to a company’s overall business insurance package or coupled with public liability insurance. It can also be bought as a stand-alone product by professionals such as consultants, architects, accountants, lawyers and surveyors, whose advice could lead to a client suffering a financial loss.Get a Quote
A Chartered Public Accountant who makes a careless mistake on the client's taxes exposes that client to large government fines, plus the cost of the defective accountancy service the accountant provided. This type of scenario is why many companies require professional contractors to have some level of personal indemnity insurance.
If your business offers legal or accounting advice, or handles someone else's data or intellectual property, you’ll want to seriously consider taking out Professional Indemnity Insurance.
This coverage is likely going to be required as part of any substantial consulting engagement, so a wise professional will find out what they need and how much it will cost. Any professional services provider should consider whether they are at risk of being sued for loss of revenue, legal fees, or damage to property and take out insurance accordingly.
Additionally, the insurance protects you from the cost of defending yourself from a false claim of damages. In the event you lose a case against a client, personal indemnity insurance protects you from paying the full cost of a huge legal judgment.
This example will illustrate how the insurance coverage works to protect an individual:
An employee in your accounting practice receives a client email containing confidential intellectual property. That employee mistakenly shares the email with someone outside the firm, in breach of your contract. The client finds out about this and files a lawsuit.
They win a judgment that amounts to £35,000, on top of your legal costs. The insurance covers almost all of that cost, less the £250 your company is responsible for. Policy terms specify different costs for the policyholder, so the customer's share of the cost may be higher with a different policy at another company.
The answer to this question depends in part on how at risk your business is of being sued. At Tradesman Insurance 4U we offer policies ranging from £50,000 to £5,000,000 in professional indemnity coverage.
Your clients may specify a required level of insurance coverage that you must carry. If that is not the case, always ask about the client’s insurance requirements before agreeing to a contract. This will ensure you and your employer are both prepared for the true costs of the work involved.
You should also make time to check your level of coverage with your Professional Indemnity Insurance provider before accepting the work.
Before you buy a policy, be sure to check the exclusions in the small print. Also, before buying, find out if the policy covers legal expenses. If you have a claims dispute, the legal bills could be very expensive and it’s a cost you won’t want to have to pay for.
We can provide insurance options for a range of employment situations: accountants, architects, management consultants, and a wide range of business professionals can all be covered through our policies.
For businesses that give advice or provide a professional service to clients, professional indemnity insurance is an important type of insurance coverage to have. It protects individuals or companies from compensation claims and legal fees that could arise if a client suffers a financial or professional loss, due to negligence in your work. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These types of things can relate to legal action that would usually not be covered by a more general liability insurance policy, which addresses more direct forms of harm.
If you are self-employed, you’ll need Professional Indemnity Insurance in case a client loses money after securing your services. This may be because of negligence or another cause.
Professional Indemnity Insurance covers legal fees and reimbursement of whatever costs the client has incurred. Judgments often also cover the financial loss the client has suffered beyond the immediate cost of your services.