There are many benefits to being self-employed, such as being in control of your time, choosing who you work with, pursuing projects that spark your interest etc. However, there are also a whole host of responsibilities and risks that come with it. One of the most important responsibilities, and one which will help reduce risk, is making sure that you are correctly insured, including Professional Indemnity cover.
The majority of contractors may never need it, however the risk of a claim is always present. If you work for yourself and don’t have insurance, you could get into serious financial trouble by the cost of defending yourself should your services cause a client any financial loss – which can simply be through simple human error.
What is Professional Indemnity Insurance?
Professional Indemnity Insurance (PI), protects you and your business should your client allege that you’ve provided inadequate advice, services or designs. It covers legal expenses in defending the claim as well as any compensation required to fix the problem.
Whilst you may have complete confidence in your abilities, knowledge and skill set, you’re still human and everybody makes mistakes! There’s always a possibility that either you or a member of your team could make a mistake, which falls to you as the contractor to correct.
What Does Professional Indemnity Insurance Cover?
The main things that Professional Indemnity Insurance covers are:
- Professional Negligence
- Loss Of Documents Or Data
- Unintentional Breach Of Copyright Or Confidentiality
- Defamation And Libel
- Loss Of Goods Or Money (Your Own Or For Which You Are Responsible)
What Professions Usually Need Professional Indemnity Insurance?
There is no specific list of professionals that may need PI, but the above cover can be applied to pretty much every industry in the contracting spectrum. Large claims could easily bankrupt smaller contractors and all it takes is a momentary lapse of concentration to cause far reaching repercussions.
Some professions are required to have Professional Indemnity Insurance by their professional bodies or regulators. Furthermore, some clients may write PI cover into contracts as a condition, as they may want to protect themselves from the cost of human error.
Professions that may be required to have Professional Indemnity Insurance by their professional bodies include:
- Chartered Surveyors
- Financial Advisors
- Healthcare Professionals
How Do I Know If I Need Professional Indemnity Insurance?
If any of the following apply to your business, you may run the risk of a claim:
- You provide advice and consultancy
- You provide an expert service
- You handle sensitive or personal information
- Its required in your client contract
- Its required by your professional body
How Can We Help?
John Heath Insurance Brokers deal directly with the UK’s leading professional indemnity insurers to make sure that we offer the lowest premiums available, always backed up by our expert friendly advice. You are able to obtain a professional indemnity insurance quote online, or you can contact a member of our team.