If your business is in the business of giving professional advice, then you’d be well-advised to get the protection that professional indemnity insurance brings. In a world where clients are increasingly seeking financial compensation through the courts for what they consider to be poor advice, having professional indemnity – P.I. – cover makes a lot of sense. But what exactly is P.I.? Which businesses need it and what do you need to look for in a policy? In this article from Coversure we’ll look at all of this and help your business get the protection it needs.
What Is Professional Indemnity Insurance?
Professional indemnity insurance is a policy that protects businesses in the event of them being sued by their clients for financial losses owing to the advice they have given them. In the event of action it could cover potentially significant costs, such as employing a legal team to conduct your defence and, should the claim prove successful, compensation payments.
What Sort Of Claims Can It Cover?
With more and more businesses providing professional business-to-business advice as we move deeper and deeper into the knowledge economy, P.I. cover has expanded its protection levels. It can now cover a variety of scenarios, such as:
- Breach of your professional duty – in other words, not doing what you said you would
- Civil liability
- Breach of a contractual liability that is not caused by negligence
- Contractual liability
- Dishonest, fraudulent or malicious acts by former or present employees of yours
- Allegations of libel or slander made by you or one of your employees
- Unintentional breaches of copyright, confidentiality or intellectual property rights
- Loss of or damage to documents
Which Businesses Need Professional Indemnity Insurance?
Not so long ago professional indemnity cover was the preserve of large organisations. Like its closely allied cover, Directors’ and Officers’ Insurance, P.I. wasn’t thought to be necessary for small and medium-sized businesses. But with the rise of the compensation culture, any business that gives advice needs to ensure they are protected as the costs involved in a claim can be devastating. The following professions are particularly at risk:
- I.T. Consultants
- Marketing Consultants
- Teachers, Trainers and Coaches
- Engineers – including those who create technical specifications as well as those who create finished products
- Agents – including estate agents, land agents and recruitment agencies
What Do You Need To Look For In A PI Policy?
This is a difficult one to answer as each industry has its own set of risks which will need to be taken into account. The best way to get the right P.I. cover for your organisation is to talk an independent insurance broker at your local Coversure office. They’ll be able to advise you on the level of cover you need – typically between £50,000 and £5,000,000 – cover that will be sufficient to insure you against the largest claim that you can realistically be expected to face. This will be calculated on a range of factors, including;
- The size of your business
- The size of the client you are giving advice to
- The type of advice you are providing
- How much you are being paid by your clients
- The type of client/the nature of the business of the client you are working with
The key thing is to ensure is that you have sufficient cover to protect your interests.
Professional Indemnity Insurance Cover from Coversure
Professional indemnity cover is something that businesses of all shapes and sizes should consider investing in. The premiums are affordable and the level of protection can be extensive. With more and more businesses seeking redress through the courts and with new threats such as cyber-attacks making business ever more risky, this is a policy that every business giving advice needs to have in place.
If you would like some impartial advice as to what P.I. protection your business needs, or would like to receive a no-obligation professional indemnity quote then contact your local Coversure office by clicking here. Alternatively, if you would like know more about our P.I. policies, then please take a look at our policy page by clicking here.