Professional indemnity insurance – are you covered?

August 30, 2010 · Filed Under Professional indemnity insurance 

Any business where you: give advice; work with client data or documents; or work within a client’s premises, may benefit from having the peace of mind offered by professional indemnity insurance (PII or PI insurance).
Policies may differ between providers and there are typically limitations, so when considering a policy you may wish to compare what is offered for the premiums.

Do you need insurance?
If you are a professional, PI insurance may be your lifeline and it might mean the difference between you losing your business and keeping it. When you stop to consider how much legal costs may add up to if a client takes you to court, you may be able to see why insurance may be so valuable to you.

There are some professions where having professional indemnity insurance is compulsory, such as if you are an accountant, broker or solicitor etc.

Do you have thousands of pounds to spare?
Ask yourself where you might get your hands on thousands of pounds if say you were accused of slander. It might be that when you are accused of slander it was a slip up on your part and you in no shape or form meant to damage your client. However the client may not see it this way and the little accidental slip up on your part may potentially end up costing you your business. An insurance policy typically provides insurance against accidental libel and slander cases and often pays towards the costs of being taken to court, subject to a successful claim for costs being made and policy limits.

Looking for an insurance policy
Insurance providers realise that there are numerous types of business and different sizes of business. For example, you may work alone or you may have many people working alongside you in your business. Therefore, with some providers you are able to tailor the insurance policy to the size of your business and your needs. The type of business you are running is also a consideration when looking for professional indemnity insurance.

You may also wish to take into account that some insurance providers offer public liability insurance in with your policy, while others may ask that you add this in for a little more each month in premiums. Public liability insurance protects your business against the possibility of a member of the public making a claim against you for loss or damage caused to them whilst on your premises.

There is typically a limit to the amount that the professional indemnity insurance pays out towards your costs, if a claim has to be made. Check the small print and the terms to find out if the policy provides adequate cover, otherwise potentially you may still have to find a great deal of money towards the costs yourself in the event of a claim.

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