Professional indemnity insurance - who needs it?
Professional Indemnity is essential if your job incorporates advising your clients, whether it be legally or financially here are a few examples of the types of jobs that requires PI cover- architects, solicitors, accountants, engineers, estate agents, IT Consultants and contractors.
Professional indemnity insurance is something that is often overlooked with devastating consequences unfortunately, no matter how good we are at our jobs or how good our attention to detail may be there is always the potential for small mistakes to be made.
These kind of mistakes, big or small, could potentially lead to you being held accountable for causing damage or loss to your clients and could result in huge claims being made against you. Without professional indemnity, your business, livelihood and even your home, could be at risk.
Professional indemnity insurance is also often taken out by a range of other professionals like consultants, designers, and members of PR and advertising firms.
Today’s savvy consumer is highly aware of their legal rights and today’s blame culture has been found to be largely responsible for the increase in claimants against a whole manner of service providers.
Although PI insurance is not required by law, when professionals are in the midst of a bidding war for a contract, most companies will insist on/prefer a consultant who has professional indemnity insurance cover in place to protect both parties.
Professional indemnity – essential insurance for you?
The purpose of this guide is to highlight the ways in which professional indemnity policy can benefit you or your small business. While professional indemnity may be compulsory insurance for some businesses, for others it gives significant peace of mind which is just as valuable.
Ultimately, by preparing for a number of legal eventualities, you are ensuring that your business is best secured and more likely to experience longevity and success in the future of your business.
If you are unsure about the level of cover you require for your professional indemnity insurance please don’t hesitate to contact the Constructaquote.com team. They can guide you through a quote and tailor the policy to your specific needs, this ensures you only pay for the cover that you/your business requires.
Professional indemnity - what does it cover you against?
PI insurance protects your business against claims made against you, for loss or damage by a client or a third party. These claims can allege that you have made a mistake or have been negligent in some, or even all of the services that you have provided.
Below are a few of the types of claims that could potentially be made against you and that Professional Indemnity can protect you from;
• If negligence has been demonstrated whilst a service was being provided. An example of this would be a website manager whose job it is to managing their client’s site. In doing this an important web page was deleted in error. A claim could be issued against the website manager for any online revenue lost over that period.
• If there was an accidental infringement on intellectual property rights. For instance, a Publisher is believed to have replicated content or borrowed ideas from previous works; said Publisher could end up being liable for large compensation fees.
• If important documents from a client were lost or damaged. Many professionals operate by spending a portion of their time in busy offices, and the rest of their time on the road during this time there is potential for files to go missing.
While you can’t always safeguard against incidents such as these, you can still protect against the financial repercussions with a professional indemnity policy.
• If a company is accused of libel or slander. However careful a company is, when dealing with a range of customers/clients there is always a risk of being accused of libel or slander. Even something as simple as a blog - a seemingly harmless publication, could get a company into serious financial/legal difficulty if someone was to takes offence or reputation was damaged in some way by your comments.
Remember, it is advisable that you examine the terms of any professional indemnity policy before you make a purchase as the extent of cover can vary between insurers.
Professional indemnity - things to consider
Professional indemnity insurance is unique in that it is generally underwritten on a claims made basis. This means that a policy must be live when a claim is issued against you. So, if your contract finishes and you cancel the policy, you will not be covered for the work you have done.
When taking out a Professional Indemnity policy, many insurers can include a retroactive date within their policy. This covers for work completed during that period i.e. if you have 2 years retroactive cover, you will be covered against claims connected with work you’ve carried out during the previous 2 years. This is an essential option if you have undertaken a lot of high-risk work in the past.
Professional indemnity insurance – essential insurance for you?
Ultimately, by preparing for a number of legal eventualities, it is a sensible way to ensure you are looking after the long term future of your business while protecting yourself at the same time.
If you are unsure of whether you require professional indemnity insurance please don’t hesitate to contact the Constructaquote.com team, who can supply you with additional information and provide you with a competitive professional indemnity quotation as well.
Professional Indemnity Insurance - from a legal point of view
Professional indemnity insurance – a small business guide