What is Professional Indemnity insurance?

What is Professional Indemnity insurance?

Professional indemnity insurance, often referred to as PI insurance. Covers legal costs and expenses incurred in your defence, as well as any damages or costs that may be awarded, if you are alleged to have provided inadequate advice, services or designs that cause your client to lose money.

Who needs PI cover?

Freelancers, consultants, contractors and subcontractors should have PI insurance, along with anyone else who provides services, advice, ideas or designs for clients. If there’s a chance you may inadvertently give bad advice, or unknowingly infringe copyright, you should look into having this cover. PI insurance will help provide for legal costs and settlements made against you so it’s really important. Professions that might need professional indemnity insurance include (but are not limited to):

  • Design & Construction
  • Engineers
  • Solicitors
  • Accountants
  • Directors & Officers

Is PI insurance mandatory?

There are certain professions where it’s compulsory to have PI insurance, such as accounting, architecture, town planning, surveying and law. The professional bodies of these industries will insist on a minimal level of PI insurance. However, even if PI insurance isn’t mandatory, it’s still important to consider if you can afford not to have this cover.

How much does it cost?

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Is it relevant to small businesses?

PI insurance is absolutely relevant to small businesses, along with freelancers and contractors. Your client may well be relying on advice your small business has given. If that’s found to be faulty somewhere down the line or incorrect processes have been followed, the client might come back at your small business with a claim for any losses they’ve suffered as a result. It’s vital that small businesses look into PI insurance, it’s when you are most vulnerable and least likely to have cash reserves to meet legal costs or payouts..

Do I need PI insurance if I already have public liability insurance?

Public liability and professional indemnity insurance do different things, so you may need to take out both. Public liability covers you for any claims that people make against you in the event of accident, injury or illness – such as a broken leg, as we’ve touched on previously, PI insurance covers you for ideas, advice or designs. It is entirely appropriate for businesses to have both kinds of cover.

How do I get a quote?

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 professional indemnity insurance