Professional Indemnity Insurance

Click Here for a Professional Indemnity Insurance Quote

What is Professional Indemnity Insurance?

Professional indemnity insurance is best suited to certain businesses and particular practitioners. It is not suitable for trade or retail but for professionals. People who are self employed, work for a business or own their own business should consider this type of insurance. It is designed to cover claims of negligence and mistakes made in giving professional advice.

It can cover professionals such as architects, small firms such as accountants and businesses such as consultancies. It can cover self-employed professionals travelling to clients chosen locations and while on client property, which can include private homes. It can also cover office premises and any negligence or mistakes in advice given here and also cover employees from consultancy and management practices conducting business to business practice. These employees are covered both at their own place of practice or offices and also at client’s businesses.

Some key danger areas your business might be exposed to include some breach of duty of care. This would usually indicate some responsibility to the client that has not been met. It might also mean negligence of an employee such as the cause of undue stress due to work pressures. Professional indemnity insurance is also concerned with intellectual property. It covers the unintentional infringing of others’ copyright, trademarks, broadcasting rights and any act of passing off.

Click Here for a Professional Indemnity Insurance Quote

It also covers the loss, damage or theft of such documents and client’s money. It can protect you from any mistakes made when dealing with a client where a dispute arises. Insurance companies can defend your claim sometimes but will also pay out if you do lose.

The amount of cover needed varies from business to business. No two businesses are the same in terms of size, type, employees and services offered. Insurance is tailored depending on the nature of the business and other determining factors such as those above. Insurers will also take the risk factor into consideration as some businesses are more likely to be sued.

Similarly to car insurance where the insurance is increased if a claim is made because the car owner presents more of a risk, indemnity insurance is raised for a business where formerly, a dispute has been raised. You can seek advice from insurance companies or financial advisors but you should not discount your own resources and knowledge. You know your own business and where the greatest risks lie and it is important to raise these with an insurer so that you are covered in areas where you will benefit the most.

It is also important to consider clients when organising insurance. This depends firstly on the nature of the services that you offer and also on client expectation. Some clients already have standards set in place that they have to adhere to with regard to indemnity insurance. Some UK government departments for example will not contract given service providers unless they are insured for at least five million.

When taking out insurance you should consider your clients and the nature of your services. You should also think about future clients if you have a relatively new or growing business or you intend to expand. Some insurance companies also offer retroactive cover so that you can insure work recently completed for clients.

Insurers also have considerations when taking you on as a client. They look at four main areas when working out what premium you should pay on a regular basis. They look at the total income from the business. The larger your business the higher your premium is likely to be. They will look at the required indemnity limit and level of excess to determine the type of policy they can offer you which will also affect the premium you pay. The nature of the business and the risk factors are also key. You should consider how they will view you as well as your own needs when calculating how much indemnity insurance to take out and how much you can afford.

Many insurance companies can be accessed online so you can input details and get at least a rough estimate of the premiums you would have to pay. You can also find out exactly what the insurance company offers and compare prices. Usually though if you are just looking at bullet points to get an overview they refer to standard policies and yours will not be an exact match although you will need to have standards met in your policy. Buying insurance is a serious undertaking and you should make sure your business is fully covered as a claim could cost you that business if you are not insured.