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Who Needs Professional Indemnity Insurance?

Posted on 19th December 2017 by Caunce O'Hara (updated July 2020 by Phil Ainley MCIM CMktr)

Do I need Professional Indemnity Insurance?

Most businesses will benefit from carrying professional indemnity insurance, but as a general rule, you will need PI insurance in the following cases:

  • If you provide advice or a consultancy service
  • If you handle sensitive personal or company information
  • If you provide an expert service, such as designs or plans
  • If you produce work that could infringe on intellectual property rights
  • If your professional membership body requires it
  • If your client insists that you have it to undertake a contract

When people think of professional indemnity insurance claims, they often think of professionals such as financial advisors, architects and surveyors, or solicitors.

For example, if a solicitor gave you bad advice and your business suffered a financial loss as a result, the solicitor would be liable for any claims you made against them, unless they have professional indemnity insurance.

Professional indemnity insurance can offer a broader range of protection.

Which professionals can benefit from PI Insurance?

Professional indemnity insurance is an often overlooked area of business insurance because individuals and business owners are either unaware of it, or they assume that it doesn’t apply to them.

If you work in a public or client-facing industry, you could benefit from the protection of PI insurance. An often overlooked area of PI insurance protection is against unintentional loss of documents or data. If you handle anyone else’s information or data or documents, then you would be held responsible if these are lost. The reason for losing the documents could be completely out of your control, such as a fire, but you would still be responsible. In this instance, your professional indemnity policy would protect you.

Is Professional Indemnity insurance compulsory?

Some professional bodies will require you to have professional indemnity insurance in order to be a member. If you are a contractor, it’s also likely that you will need PI insurance in order to be able to win a contract. It doesn’t matter if your business is large or small, the risks are the same if you decide to offer advice, consultancy or an expert service without PI insurance.

What level of PI cover do I need?

This depends on the sort of work you do and the risk associated with it. For energy contractors, we offer 5 limits of cover, ranging from £100,000 to £2m. For freelancers, we offer 9 limits of cover, ranging from £50,000 to £5m. The amount of PI coverage required will depend on the work you do and the potential risk.

Get in touch today to discuss your needs and let us build you a personalised quote.

Find out more about Professional Indemnity insurance here

For a competitive professional indemnity quote, please call our friendly award-winning team on 0333 321 1403

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