Professional Indemnity InsuranceProtect your business from mistakes if you offer professional services, recommendations or advice
Professional Indemnity Insurance (PI Insurance) gives your business financial support and protection if a customer claims that you have made a mistake or given them bad advice.
With the right cover in place, you can meet defence or legal costs and any resulting compensation from the claim.
Although not necessary by law, many trade and regulatory bodies require this insurance to be in place in order for you to maintain membership. Other businesses find that it instils confidence in what they do, and that it provides some much-needed peace of mind when delivering professional services, advice or recommendations to clients.
Key benefits of choosing CKI
- The best protection at the best price for your needs
- Impartial guidance
- A direct line to your account manager
- Expert knowledge and understanding of businesses’ needs
- First-class service that exceeds your expectations
- Helpful claims assistance for quick and efficient settlement of claims
- Ongoing support throughout your time with us
- Free insurance review outlining the risks you face and the solutions
Chris Knott Insurance is always straightforward and clear. Whenever I have had to phone, the staff are friendly, professional and explain everything well.
Professional Indemnity Insurance FAQs
What is Professional Indemnity Insurance?
Professional Indemnity Insurance, sometimes also known as Professional Liability Insurance, can protect your business if you make a mistake or give bad advice that harms your clients. Claims could revolve around:
● The loss of a client’s data
● The publication of false or misleading statements
● The use of copyrighted material
● Negligent advice
● The sharing of confidential information without consent.
If a claim is made, Professional Indemnity Insurance can step in to help pay your defence costs and compensation.
It isn’t needed by law, but several regulatory organisations and trade bodies require it as part of their membership criteria. Failing to have it in place could lead to fines or the cancellation of your membership.
Who needs Professional Indemnity Insurance?
Even the most diligent businesses can make mistakes, which exposes you to risk. These risks can have expensive consequences, with claims leading to pricy legal fees and potential compensation.
Professional Indemnity Insurance can protect any business that provides professional services, advice or recommendations to clients, helping to pay these fees and damages.
For some businesses, PI Insurance is a must if you want to remain a member of a particular regulatory or trade body. For instance, the Financial Conduct Authority (FCA) requires financial advisors, mortgage intermediaries and insurance brokers to have it in place. Solicitors, architects and accountants are also likely to need it for their membership of professional bodies.
Other businesses may not need it by law or for membership, but have it in place anyway because of the kind of work they do. For instance, IT companies, private tutors, interior designers and recruitment consultants can benefit from cover because their work could lead to claims of poor advice, negligence or mistakes.
What does Professional Indemnity Insurance cover?
Professional Indemnity Insurance provides financial protection in claims of professional negligence, errors or omissions, and breaches of professional duty or civil liabilities.
Financial protection usually includes paid defence costs, including counsel and associated fees, and compensation. It can also be extended to cover other legal expenses and business equipment. This can all be tailored to fit your particular profession, so make sure you discuss this with your Professional Indemnity Insurance broker.
How much Professional Indemnity Insurance do I need?
The amount of Professional Indemnity Insurance you need will depend on the work you do as some sectors are riskier than others. The scale of your contracts and the size of your business will also determine the amount of cover needed.
Some trade bodies and regulatory organisations may specify a certain indemnity limit too, so check this if applicable.
You may also want to think about whether you would like your cover to be backdated. Some insurers will allow you to put the start date in the past, which will provide you with additional cover should a claim be made about work you carried out before you had insurance in place.
How much is Professional Indemnity Insurance?
The cost of Professional Indemnity Insurance is very dependent on your business and the work that you do.
The type of business you carry out will have an influence as some sectors carry more risk. The amount of cover you choose and the excess will also have an influence, as will your business’ turnover.
To get a better idea of the cover you need and what this will cost, you can speak to Professional Indemnity Insurance brokers here at Chris Knott Insurance.
What is the difference between Professional Indemnity Insurance and Public Liability Insurance?
Professional Indemnity Insurance helps to financially protect businesses that provide professional services from claims of mistakes or bad advice. For instance, an architect may submit a plan with the wrong specifications or a marketer could publish an incorrect statement about a company, damaging their client’s reputation and leading to a claim.
Public Liability Insurance, on the other hand, protects your business if a customer or member of the public is injured or their property damaged as a result of the work you do.
Can I get sole trader Professional Indemnity Insurance?
If you provide professional services, advice or recommendations to clients as a sole trader, freelancer or self-employed individual, then having Professional Indemnity Insurance in place can give you valuable peace of mind.
During the course of your work it is possible that you could offer the wrong advice, accidentally reveal personally identifiable information, make a mistake in the plans you submit or publish a misleading statement. If this leads to financial, reputational or other losses for your client, they could make a claim against you. This can lead to costly legal fees and compensation payments.
Having Professional Indemnity Insurance can provide you with vital financial protection if this happens.