Mistakes sometimes happen, no matter how diligent you and your staff may be and how many processes you have put in place. It could be that you have accidentally shared confidential data. Or you have provided professional advice or design services to a client that they feel has caused them financial hardship or has damaged their brand or reputation.
Professional Indemnity Insurance
What is professional indemnity insurance?
What is professional indemnity insurance?
This is where professional indemnity insurance (PI insurance) steps in. This is a form of liability insurance that covers the cost of legal fees and any court awards (up to set policy limits) should someone seek compensation from you for something they believe you have been negligent with, or when seeking money to rectify the mistake you have made.
This insurance will only protect you if the claim arises from accidents and unintentional situations. It will typically not cover you for fines and court awards arising from a deliberate attempt to break the law.
What does professional indemnity typically cover?
What does professional indemnity typically cover?
A typical policy may provide you with a range of cover (up to set limits of course) possibly including:
- legal fees (remember, you may run these up even if you win the case);
- unintentional beaches of contract and client confidentiality:
- awards against you;
- the accidental loss of a client’s critical documents;
- defamation and libel;
- claims that you have accidentally infringed copyright or intellectual property rights.
PI insurance can be tailored to meet your business’ needs, meaning you can feel confident that you have the most appropriate cover.
Who is professional indemnity suitable for?
Who is professional indemnity suitable for?
- members of some professions – such as accountants, architects and lawyers – are obliged to hold this insurance cover as part of their industry bodies' regulatory requirements;
- other businesses may find that when pitching for a job, their prospective client will require them to have appropriate professional indemnity insurance cover in place before any work begins. (Typically this will be professionals working on a contract basis - such as management and business consultants, and IT contractors);
- even if it is not mandatory for your own particular business type to have PI insurance, in the event of a claim, you could have to pay thousands of pounds in compensation and legal fees - money that your business may not have.
Summary
Summary
If you have a good working relationship with a client, it can all go sour overnight if something goes wrong. Professional indemnity insurance steps in to help put any mistakes right and help recompense your client – while still protecting your reputation.
Professional indemnity insurance may be an important tool in your business protection toolbox. To find out more about the product, why not get in touch with us at Specialist 4? We can provide tailored professional indemnity insurance options to ensure that your business - and reputation - is properly protected.
