What is Professional Indemnity Insurance?
If you are in business in a professional, advisory or service related capacity you should consider getting Professional Indemnity Insurance. This is a form of insurance your customers or clients can rely on should there be a need to claim against the work you or your business has done.
Typical aspects requiring this cover for include; negligence or breach of duty of care by you or your staff; Infringing others copyrights, trademarks, broadcasting rights, any act of passing off; damaged, lost or stolen data and documents belonging to your clients; and potentially theft of clients money.
Seven Reasons to Get Proessional Indemnity Insurance
1. Good professional indemnity insurance will cover legal costs that you may incur defending yourself against a claim for damages.
2. Damages awarded against you or your business can be enough to bankrupt or close many small businesses.
3. If you are a professional like a doctor, financial advisor or solicitor some of the size of claims may be exorbitant. Adequate cover may be a necessity to allow you to practice or operate.
4. Some contracts particularly with public bodies will require a minimum cover for Professional Indemnity Insurance. Even an architect, web designer or IT consultant may be expected to have £2m -£5m cover in place.
5. General insurance cover will not indemnify the policyholder against losses incurred only as a result of their negligent act, error or omission in carrying out the policyholders business but Professional indemnity cover should.
6. Professional Indemnity Insurance should cover the cost of putting your mistakes right to minimise claims.
7. You will get access to professional insurers help in the event of a claim. Someone who is used to defending and managing claims can help you sleep a bit easier.
Employees are generally covered by the employer. Special cover exists for NHS staff for example.
If others are to rely on your judgement and professional skill then as part of that reliance it is well worth maintaining adequate Professional Indemnity Insurance.