Being an expert doesn't come easy. It's something you've worked hard to achieve, and it makes you an extremely valuable commodity.
However, it also leaves you vulnerable. With clients placing their trust in your service, what happens if they start to believe that the help you've provided has left them worse off - either physically, materially or financially?
That's where professional indemnity (PI) insurance comes into play.
What is professional indemnity insurance?
Professional indemnity insurance is designed to protect professionals if it's alleged their service has resulted in a person or business suffering injury, damage or financial loss. The insurance is usually considered essential by businesses that offer any of the following services:
- Design - for example buildings and other structural plans.
- Advice - typically legal matters and financial factors, including tax and purchasing decisions around property or shares.
- Specification work - for instance construction projects and similar areas.
Who needs professional indemnity insurance?
Some professionals are required to have cover – either by law or their respective regulatory bodies – in order to practice. These include:
However, there are other occupations where – even though PI insurance is not a legal requirement – professionals could still benefit from the cover. For example, media buyers and charities might consider this type of cover because they are liable for any advice they provide.
Professional indemnity insurance claim examples
To give you a better understanding of the protection that professional indemnity could provide, here are two examples to show where the cover could prove essential:
- You're an accountant. When helping a client with their tax, you provide them with incorrect advice. This mistake results in your client's tax liabilities increasing and they accuse you of professional negligence as a result. This is where your PI insurance could cover any subsequent legal or compensation costs
- You're a surveyor. During an inspection of a property, you fail to spot an issue with rising damp. The prospective buyer subsequently goes through with the purchase and unexpectedly has to pay for repairs. Your professional indemnity policy could cover the costs you may face if the buyer claims you're to blame for their losses.
It's important to note that these are just fictitious examples. Every incident is unique and will be carefully scrutinised by insurers when a claim is made.
Professional indemnity insurance prices
Due to the fact that every business is different – and will therefore be exposed to different levels of risk – it isn't really possible to give an indicative figure of the cost of professional indemnity insurance for your business without a thorough analysis of its circumstances. There are a number of factors that could influence the price of a quote that you receive, including:
- The size of your business
- The number of employees you have
- The experience and qualifications of your employees
- Your past claims history
- Your business’s legal structure.
These are just a few of the many factors that an insurance provider may take into account, so the best way to get an accurate figure for PI insurance is to get a bespoke quote, tailored to your business’s individual needs.
Compare professional indemnity insurance
At Make It Cheaper Financial Services, we can help you decide if professional indemnity insurance is right for you. Our brokers can provide you with a bespoke policy that includes the appropriate protection for your business.
We’ll arrange all the necessary paperwork – and we’ll even be on hand to help if you ever need to make a claim. Call us today on 0800 144 4808 to get a cheap professional indemnity insurance quote.
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