Professional Indemnity (PI) is an essential insurance cover that will protect you against negligence claims from unhappy customers. If you are starting out in business or are an established business providing professional advice for a fee then chances are you will be obliged to take out some kind of business insurance as a condition of your contract. Typically, clients will expect third party contractors to be covered for business liability and professional indemnity.
If you are a limited company the responsibility for taking out the right insurance policy is your own. In this article, we will explain what eventualities PI cover will protect you against, and how to find good quality cover without breaking the bank.
What is Professional Indemnity Insurance?
Why Professional Indemnity
You are likely to need this type of cover if you provide professional advice to your clients, or provide a professional services which could potentially be challenged by a dissatisfied client.
PI will provide professional representation, and pay for damages if a client successfully sues you for a variety of mistakes you may make during your career as a contractor, including:
Negligence – e.g. you provide incorrect advice, or make a mistake in your work.
Unintentional breach of copyright or confidentiality
Loss of data
Loss of documents
Breach of contract, such as in the supply of software and hardware to a client.
7 reasons to embrace Professional Indemnity
How to select the right type of PI policy
Clients will often stipulate their minimum level of required cover before you can start work. Cover is available from £100,000 to £20m and more if necessary. Unsurprisingly, you can expect to pay more for higher levels of cover.
Most technical areas will be covered by standard PI policies, but you may need to ask for a custom policy to be created for you if you undertake unusual or highly specialist work.
Don't make the retroactive date mistake
A ‘retroactive’ policy is designed to provide you with cover from the date when you started contracting (i.e. a date in the past). Providing you have no outstanding claims, or knowledge of a potential claim, it is wise to bolt on a retroactive element to your policy.
Further down the line, you may wish to take out ‘run off’ cover, which will protect you against past claims for several years after you decide to retire, or take a break from your contracting career.
At Ascend our professions team are independent specialists who are not tied to any "preferred markets" or single insurer solutions.
This approach means we can access outstanding insurance cover for every client and provide specialist claims handling and risk management services – all at a highly competitive price.
We provide professional indemnity insurance and other related liability insurances and have access to the whole of the open market.
This means our clients benefit from a full market review, competitive pricing and access to more appropriate wordings for their risk by a specialist who can guide you through any bespoke requirements you may need.
To find out more contact one of the team at Ascend today.