What is Professional Indemnity?

Peace of mind with Professional Indemnity Insurance

Posted on 27th February 2018 by

As a business you can gain peace of mind with a comprehensive Professional Indemnity Insurance policy.

Professional indemnity insurance protects the holder from legal expenses in the event they are alleged to have provided an inadequate service or advice.

Example: An architect provides drawings for an extension which are incorrect. The building team get to work and discover the mistake. The cost to fix the problem is £000’s. Without professional indemnity insurance, the architect would be responsible for paying the costs full. With PI insurance, the legal fees and compensation awarded are both covered by the policy.

Click here for a freelance professional indemnity insurance quote

Who needs professional indemnity insurance?

If you provide advice or professional services, you should have PI insurance to protect you. There are some industry-specific forms of insurance, such as medical malpractice insurance for medical professionals. If you work in any of the following roles, you should have professional indemnity insurance:

  • Architects
  • Business consultants, including marketing and training consultants
  • Graphic designers
  • IT professionals
  • Recruitment consultants
  • Private tutors
  • Fitness professionals, including personal trainers

Is PI insurance expensive?

Contrary to popular belief, PI insurance cover is not expensive. Our policies start from as little as £98.00 per annum depending on your profession. Even though PI claims might be rare, it’s always best to ensure you are fully protected as you could be left to pay the legal fees and compensation yourself.

What does Claims Made and Run-Off cover mean?

Professional Indemnity insurance is on a “Claims Made” basis meaning cover has to be active when the complaint or claim is received.  The retroactive date has to be earlier than the date you carried out the work that has resulted in the complaint.  When you close your business or retire, clients can still bring a claim against you for errors made when you carried out the work for them, for this reason you need run-off cover.

What’s the difference between each and every claim and in the aggregate?

This is just two different ways that your cover ceiling is managed. In the aggregate means that you will have a limit for all claims made within a period. So, if you have a £250,000 limit and have one claim of £200,000 and one claim of £50,000, you will be covered. Anything over the aggregate will need to be covered by other sources.

Each and every claim means that the ceiling applies to each claim made. This will mean there is a limit to each claim made, rather than adding up the total of all claims made in a period.

If you’re struggling to get your head around professional indemnity insurance, why not get in touch with one of our friendly team. They’ll be able to answer all your questions and make sure you choose the right policy for your need.

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

Find out more about P.I. Insurance here


Author Phil Ainley, Marketing Manager