Professional Indemnity Insurance

If you offer professional services, advice, or knowledge either as a self-employed individual or for a company, it’s advisable to consider getting professional indemnity insurance. This type of insurance covers the cost of compensating clients or third parties for any loss or damage resulting from negligent services or advice provided by you or your business.

While some professions, such as solicitors, accountants, architects, chartered surveyors, and some healthcare professionals, are required by their professional bodies or regulators to have professional indemnity insurance, many other businesses choose to get it to protect themselves against potential claims. These businesses include advertising agencies, consultancies, design agencies, and public relations agencies, among others.

Professional indemnity insurance usually covers claims made during the term of the policy, and it’s important to note that cancelling the policy without getting a run-off policy may leave you exposed to new claims that can be brought against you for up to six years after an alleged negligent act. If you’re changing insurers, it’s essential to check if your new insurer covers you for claims relating to previous incidents, or to purchase a run-off policy to ensure continued protection.

The amount of cover you need and the price of your premium will depend on your occupation, and some professional bodies or regulators may insist on a minimum amount of coverage. If you’re not a member of a professional body, you can ask your clients about the amount of coverage they expect you to have.

Some additional details about professional indemnity insurance:

1. It can protect your reputation: Even if a claim against you is unfounded, it can still damage your reputation and harm your business. Professional indemnity insurance can help to defend your reputation by covering the cost of legal fees and other expenses associated with fighting a claim.
2. It can cover a wide range of professions: While some professions are required to have professional indemnity insurance by their professional bodies or regulators, many other professions can benefit from having this type of coverage. This can include anyone who provides professional advice or services, such as consultants, engineers, IT professionals, and more.
3. It can provide peace of mind: Knowing that you have professional indemnity insurance in place can help to give you peace of mind that you are protected against potential claims. This can help you to focus on your work without worrying about the financial and legal consequences of a mistake or error.
4. The cost can vary: The cost of professional indemnity insurance can vary depending on a range of factors, including the type of work you do, the amount of coverage you need, and the level of risk associated with your profession. It’s important to shop around and compare quotes from different insurers to find the right coverage at a price that works for you.
5. It’s not the same as general liability insurance: While general liability insurance can cover you against bodily injury or property damage claims, it doesn’t cover you against claims related to professional services or advice. Professional indemnity insurance is specifically designed to cover these types of claims, so it’s important to have both types of coverage if you need them.