What is Professional Indemnity Insurance?
Professional indemnity insurance (PI insurance) protects you if your client suffers a financial loss because of your work for them. Everybody makes mistakes sometimes, but even the smallest of mistakes can have larger repercussions.
Do I need professional indemnity insurance?
Even if you’ve not done anything wrong, the cost of defending yourself against any claims made against you for negligence or mistakes could be expensive. Professional indemnity insurance can be beneficial to a variety of businesses from contractors and consultants, to accountants.
You’ll need professional indemnity insurance if:
- Your business gives advice
- Offers professional services
- Handles client data or intellectual property
Some professional membership bodies and regulators might even require you to have it.
What does it cover?
PI insurance can cover you if a customer or client loses money as a result of negligence or your services. PI insurance can cover the cost of legal fees and compensation payments, as the compensation will often consider the financial loss that’s being claimed.
For example, if you accidentally send an email containing confidential information to the wrong person and the company sues you for breach of confidentiality, professional indemnity insurance can help you recover any costs.
Professional indemnity insurance covers:
- Professional negligence or breach of duty of care (making a mistake in your work or providing bad advice)
- Unintentional copyright infringement
- Unintentional breach of confidentiality (sharing information that’s confidential or sensitive without consent)
- Loss of data or documents
- Defamation or libel (a false statement that is damaging to a company’s reputation)
How much cover do I need?
It’s always worth asking your customers and clients how much cover they need you to have, to ensure you’re protected in the unlikely event that something goes wrong.
Making sure you have the right level of cover before you start a job is crucial. If you need to change your level of cover, let your insurance provider know as soon as possible. Underestimating the amount of cover you need could mean that any claims you make might not be paid.
If you don’t have professional indemnity insurance, click below to get a quote from our partner; Simply Business.