Professional Indemnity Insurance
Provide Your Business with the Protection it Deserves
Have you ever wondered what professional indemnity cover is and if you need it? Often referred to simply as PI insurance, this policy type covers the insured in the event that a client you’ve provided services for claims that there’s been a mistake, negligence on your part or reputational damage suffered as a result of those services.
Here at Insurance by Simply we secure businesses competitively priced professional indemnity insurance policies to keep them protected, and give them better peace of mind.
What is Professional Indemnity Insurance?
Professional indemnity insurance protects you and your business in the event of professional negligence, misrepresentation, damaged documentation (or lost documentation), defamation, dishonest acts by employees and breach of copyright. Professional indemnity insurance policies can also help businesses cover compensation for court attendance, crisis management services, ombudsman awards and more.
When you take out a professional indemnity insurance policy, you would need to consider whether you want to include retroactive cover as part of the policy. As long as professional indemnity cover has been continuously maintained this covers claims made for services carried out during a previous period, before the policy’s start date. Professional Indemnity is on a claims made basis, only providing cover for claims made during the period of insurance that the claim comes to light. To determine the length of your retroactive cover, consult one of our brokers or seek other professional advice.
Design and construction companies and architects, for instance, might need a longer retroactive cover period than other professionals, as professional negligence can take many more years to become apparent.
Why Do I Need Professional Indemnity Insurance?
For most businesses Professional indemnity insurance isn’t a legal requirement, however it can be a contractual requirement, and we still recommend that all businesses and sole traders should take out a policy. Why? Without it, you leave yourself vulnerable to claims and being put seriously out of pocket. Given that just the legal defence costs of some PI claims can rack up into the thousands of pounds or even the hundreds of thousands of pounds, it’s simply not worth the risk to go without professional indemnity insurance.
Who Needs Professional Indemnity Insurance?
We recommend that any and every business takes out a professional indemnity policy, particularly those that have more frequent interactions with third parties such as customers and clients. Those businesses and sectors particularly in need of professional indemnity include
Solicitors
Construction Companies where there is an element of design/advice
Engineers
Healthcare professionals
Surveyors
Financial consultants
Accountants and bookkeepers
IT consultants, website designers, programmers and developers
Journalists and media professionals
First aid trainers (as well as other training providers)
Architects and graphic designers
Private tutors
In short, any business that provides what could be construed as a ‘professional service’ can benefit from the safety that a professional indemnity insurance policy provides.
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What Level of Cover Do I Need?
Cover for professional indemnity ranges from the relatively low £50,000 all the way through to £5 million or more (for truly huge businesses). The level of cover you require depends on several factors, including the size, as well as its inherent risk. Larger businesses with more risk will typically require more professional indemnity, for example, than a freelance sole trader. If you are a contractor or a consultant you may have to consider contract values, all parties involved could have to carry the same limits of indemnity even if the work you carry out is a smaller part than others.
What’s more, if you want to join certain trade bodies or associations then you’ll need a minimum level of professional indemnity insurance. For instance, the Royal Institute of Chartered Surveyors (RICS) requires that businesses with a turnover of less than £100,000 annually have PI insurance worth £250,000, whilst those businesses that have an annual turnover exceeding £201,000 must have minimum indemnity of £1,000,000.
Do Freelancers Need Professional Indemnity Insurance?
Purchasing a professional indemnity policy is a sensible idea for freelancers, as they typically run smaller operations and use a cash-flow model to operate. This means that liability claims can be more financially damaging than for larger businesses that have credit to fall back upon. To prevent incurring such catastrophic losses, we’d recommend every freelancer takes out at least a minimal professional indemnity insurance policy.
How Much Does Professional Indemnity Insurance Cost?
Professional indemnity policies range in cost depending on the level of cover you require. To work out how much your PI cover will cost, get in touch with one of our specialist brokers.
Why Specialist Brokers Like Ours Make the Difference
But why go with a specialist broker rather than straight to the insurers themselves? Insurance by Simply’s brokers can help you get better deals using our extensive network of contacts within the insurance industry, we work with Lloyds markets and the more specific, bespoke insurance providers.
We can work together to fully understand your business, to put together an entirely tailored and personalised professional indemnity policy so that you’re never again left in the lurch should a claim be made against you or your business. Whether you want your policy as a standalone premium, or as part of a broader business insurance policy, we can cater to your needs.