what is Computer contractor PII and why might you need it?
With a long list of happy clients behind them, a computer contractor may feel there is no need for any extra cover for their business. Things like professional indemnity insurance have in the past often been associated with people like accountants and architects, so other professionals may think this kind of cover is unnecessary. While it’s true that legal action is by no means guaranteed, there is a chance that any future dispute with a client could lead to a problem. Computer contractor PII can also be less expensive than people think, and can kick in to pay someone’s legal bills if it is ever needed.
PII stands for professional indemnity insurance, which is a brand of cover designed to help somebody if they are ever sued following a mistake. This is a basic generalisation and a more precise definition would be to say it pays out in the event that an individual or business is accused of having made a mistake or committed an act of negligence in their work.
While most jobs will go smoothly and without incident, some cannot go completely to plan and at times a client may legitimately or unfairly accuse the consultant of making an error which has cost them money. This is a typical circumstance in which legal action might ensue.
Computer contractor PII would not only cover the legal cost of hiring help to defend a case, such as fees run up by a defence solicitor, but will also pay the cost of any compensation if it happened to be awarded against the policyholder. This kind of cover can also be more flexible than people think, and something known as retroactive cover even protects the policyholder against claims which arrive in future but which date back to something which happened in the past. This can be helpful for anyone who has only just got around to organising this kind of insurance.
Computer contractor indemnity cover can also be tailored to protect a business after it has ceased trading or the owner has retired, as they may still be vulnerable to legal action relating to past events. This is known as runoff cover, and can also be used when someone is looking to change insurer.
There will of course be a policy limit as with other kinds of insurance, and beyond this agreed amount an insurer will not pay out any further towards legal fees or compensation. This is agreed when someone formalises computer contractor PII with their insurer.
Comments
Leave a Reply