Professional indemnity insurance provides insurance cover that will protect you if you are negligent or make a mistake and a claim is made against you arising out of a service or advice that you have provided.
If you have provided services to a client and as a result the client has suffered financial loss or has had their reputation damaged, this cover will pay for any legal costs involved together with any compensation you may have to pay as a result of the claim that has been made against you.
Although the cover can vary slightly between insurers, a policy will also cover the following:
- Libel and slander
- Loss of documents
- Dishonesty of employees
- Unintentional breach of confidence
- Infringement of copyright and intellectual property rights
- Previous firms or previous partners
When you change professional indemnity insurance providers or if you cancel your professional indemnity insurance policy, you need to mindful of the fact that a client may make a claim against you many years after you did the work for them. This can be the case when perhaps you have retired from work. You should ensure that the Retroactive date is correctly specified on your policy to ensure cover operates for work you have done in the past. It would be prudent to carry on paying for professional indemnity insurance, even in your retirement, to cover an eventuality where a claimant may make a claim against you for work you have done previously.
Many professions are legally required to carry professional indemnity insurance, such as; Solicitors, Accountants, Architects and Financial Advisors. You may also be required to have this cover as a result of a contract you have entered into. This occurs very often with IT Consultants and Web Design consultants.
As always, please call us with any queries regarding this cover.