Confused as to whether you need professional indemnity insurance? If so, read on to find out whether it’s relevant for your particular business.
What is professional indemnity insurance?
Professional indemnity insurance (also known as PI) is a type of liability insurance that helps protect business professionals should they make a mistake (or an alleged mistake) with their work that causes a client to suffer some kind of financial loss.
What’s the difference between professional indemnity insurance and public liability insurance?
Professional indemnity insurance is very different to public liability insurance, even though they are sometimes referred to together. Whilst professional indemnity insurance covers you against financial claims arising from negligence, public liability insurance protects your business against compensation claims from customers or members of the public relating to personal injury or damage to possessions or property.
Does my business need professional indemnity insurance?
Professional indemnity insurance can be purchased by anyone who offers services as part of their profession, for example accountants, bookkeepers, financial advisers, graphic designers, architects, web developers and business consultants, to help protect them against human error or negligence. Professional indemnity insurance offers legal cover in the event of a business being sued or getting involved in a potential lawsuit should anything go wrong on a project.
It is increasingly being asked for when tendering for council or corporate contracts, even when the exposure is minimal. Examples of trades where we’ve seen it being requested include cladding contractors, carpenters & locksmiths.
Is professional indemnity insurance a legal requirement?
Unless it is a requirement of your professional association, a business is not legally required to have professional indemnity insurance, although it’s very sensible to do so. Not only does it offer peace of mind, for both the business owner and his or her clients, but it also helps protect personal assets. It can also assist in winning new business, as having professional indemnity insurance provides clients with extra confidence when using the services of your business, especially if other companies quoting for the work don’t have such securities in place.
How much professional indemnity insurance cover does a business need?
If you’re a member of a professional body, you may be required to have a specified minimum value of professional indemnity insurance as part of your joining requirements. Having professional indemnity insurance may also be a condition of being able to work for a certain client or tendering for a specific project.
You can find out more about the level of cover you may need by speaking to an insurance broker, like Prizm Solutions. At Prizm, we take the time to find out more about your business, in order to be able to talk to you about the best policy to suit your specific needs. We’ll use our extensive knowledge and experience to advise you about industry standards and best practices in your field, to ensure you’re covered for any eventuality.
How much does professional indemnity insurance cover usually cost?
The cost of professional indemnity insurance will vary depending on a number of factors, such as the amount of cover required, the type of business and the services provided. Where the services are provided may also affect the quote, whether your business works only in the UK or in other countries around the world.
Professional indemnity insurance for a low-risk micro business could start as low as £100 per annum, whereas larger corporations would have a much larger insurance bill to cover their PI.
How would I get a quote for professional indemnity insurance for my business?
To get a quote for professional indemnity insurance, just contact the friendly team at Prizm Solutions on 01827 313931. One of our experienced staff will have a chat with you to find out more about your business, then suggest some of the best routes forward to provide your company with the right cover to suit your business circumstances.
As an experienced insurance broker, we’re qualified to help you find the right policy for your business needs. We’re also totally transparent about our commission/fees and how we charge for our services, so you know exactly what you’re paying for.