Professional indemnity insurance (PI insurance) is a type of insurance that provides coverage when a client sues you over errors, oversights, or alleges negligence in your work, even if you did nothing wrong. Here are some things to know about professional indemnity insurance and whether you need it:
What is professional indemnity insurance?
- Professional indemnity insurance covers you for claims over the quality of your work, but it doesn't cover every risk your business could face
- PI insurance can cover your legal costs and expenses incurred while defending the claim, as well as damages or costs that may be awarded to your client
- PI insurance is offered by specialist insurance brokers, and you can purchase either a ready-made off-the-peg policy or work with them to draw up a custom policy that meets your specific needs
Do I need professional indemnity insurance?
- PI insurance is not a legal requirement, but professionals who work in certain sectors should still consider it one of their core business needs
- If you provide professional services, including expert advice and consultancy, to clients, you should consider PI insurance
- PI insurance is usually a priority if your line of work can lead to disputes over quality, vision, or copyright, or if your work leaves you exposed to claims of professional negligence
- If you have access to confidential customer information or are a member of a professional body that requires PI insurance, you should consider getting it
- Some clients may choose to make PI insurance a contractual requirement, or your industry regulator might say it's essential
In summary, professional indemnity insurance can provide coverage when a client sues you over errors, oversights, or alleges negligence in your work. While it is not a legal requirement, professionals who work in certain sectors should still consider it one of their core business needs. If you provide professional services to clients, have access to confidential customer information, or are a member of a professional body that requires PI insurance, you should consider getting it.
Here are some professions that are most likely to need professional indemnity insurance:
- Accountants: Most accountancy bodies require professionals who wish to practice as an accountant under their auspices to hold a professional indemnity insurance
- Architects: Architects are at risk of professional indemnity claims due to the nature of their work, which can lead to disputes over quality, vision, or copyright
- Chartered surveyors: Chartered surveyors are at risk of professional indemnity claims due to the nature of their work, which can lead to disputes over quality, vision, or copyright
- Counsellors and therapists: Counsellors and some therapists are at risk of professional indemnity claims due to the nature of their work, which can lead to disputes over the quality of their advice or services
- Engineers: Engineers are at risk of professional indemnity claims due to the nature of their work, which involves infrastructural development and can lead to disputes over quality or vision
- Financial advisors: Financial advisors are at risk of professional indemnity claims due to the nature of their work, which involves giving advice that may go wrong and lead to financial loss for the client
- Medical practitioners: Medical practitioners are at risk of professional indemnity claims due to the nature of their work, which involves providing medical advice and treatment that may lead to disputes over quality or negligence
Overall, any professional who deals with clients is at risk of a professional indemnity claim, but certain professions are more likely to need this insurance than others. If you provide professional services, including expert advice and consultancy, to clients, you should consider professional indemnity insurance.
For more information on how 'Professional Indemnity Insurance' can help your business. Tel: 01582 346291 or email: info@orchardfunding.co.uk