Professional indemnity insurance, sometimes referred to as PI insurance, provides protection for professionals who could be the subject of litigation due to mistakes they make.
If you provide any kind of professional service, this insurance may be something that you want to invest in so that you do not have to worry about potential mistakes causing you serious financial problems, nor affecting your reputation.
Why you may need professional indemnity insurance
No matter how careful you are to avoid mistakes when providing a professional service, things can still go wrong. You could provide advice that turns out to be wrong, or you could make a seemingly simple mistake that costs a lot of money for your client to rectify. In such situations, you could find yourself facing a claim for compensation.
Mistakes like this can happen in a wide range of professions, including graphic designers, financial advisors, architects, accountants and many more. Essentially, if you provide any kind of professional advice or service, the risk of making a potentially costly mistake is always there.
This type of insurance provides you with peace of mind in knowing that you are protected in any circumstance. Even if you are not to blame for a mistake, you may still have to defend yourself, and the legal fees can be costly.
In addition, if you work in certain sectors, you may find that clients are only willing to hire your services if you can show that you have professional indemnity insurance in place.
What does it cover?
Professional indemnity insurance can cover a wide range of situations. It essentially covers your legal costs should a claim arise, including solicitor’s fees and legal counsel, as well as any compensation that is due up to a set limit.
The reasons why a claim may be made in the first place could be due to:
- loss of sensitive client data;
- infringing the rights of a client;
- providing professional advice that turns out to be wrong;
- making a mistake that is expensive for the client to rectify.
Things to look out for
You may be able to get a specialist policy that is targeted toward your area of expertise. For example, policies may exist that are targeted specifically at accountants, architects, IT professionals, etc.
The cost of the cover can depend on the type of business you run because there is a greater risk of claims being made in some professions. It can also vary depending on the amount of cover you want to have in place, which can range from a few thousand pounds to millions of pounds.
Whether you have had any claims in the past can also affect how much you pay for your policy.
In addition, you may find that you can get extra types of cover added on, including public liability, product liability, employers’ liability and office contents.
Protect yourself in your profession
If you provide any kind of professional service, you may find this type of insurance useful. Even if you always take every care to provide a good service, the fact is that mistakes can happen.
Knowing that you are financially covered for any eventuality can provide you with peace of mind and allow you to focus on your profession without the constant worry of having to defend yourself against claims made against you.
