Professional Indemnity Insurance
Professional Indemnity Insurance
What is professional indemnity insurance?
Professional indemnity insurance protects your business if you and your business are found to have provided bad advice or poor service, which has resulted in your clients or others losing money/business.
Professional indemnity insurance isn’t a legal requirement, however not having it in place could mean that if something does go wrong for a client following your advice, your business could be responsible for the legal fees, expenses, compensation costs or other costs incurred in your defence.
Is professional indemnity insurance required by law?
Unlike employers’ liability insurance, professional indemnity insurance isn’t a legal requirement. However, many clients will prefer to deal with businesses that are protected by professional indemnity insurance, and may not work with you if you don’t have it.
What does professional indemnity insurance cover?
What's covered would depend on the level of cover you require for your specific business;
- Choice of cover levels (up to £5 million)
- Paid compensation bills
- Paid defence costs- including solicitors fees and counsel
- Tailored & specialist policies available to fit your unique business
Who needs professional indemnity insurance?
Majority of small businesses take out professional indemnity insurance. If you provide professional services or consultancy, or handle client data and intellectual property, it’s a very useful protection to have – covering legal fees and compensation costs if you lose a claim that a client brings against you.
You need professional indemnity insurance if:
- You provide advice and consultancy
- You handle people’s information
- A client insists you have it
- You provide an expert service
- Your professional body requires it
Can you give me a typical example of a professional indemnity claim?
A construction worker could make the slightest of measurement mistakes on a project, that causes the client to make a claim against you– this type of insurance will cover any associated legal costs or compensation claims that may arise as a consequence.