Professional Indemnity Insurance (PI) – is a type of business insurance that will cover the costs of your legal defence and any appropriate rectification costs (the costs of making a mistake right) if a client you have done work for takes legal action against you for a financial loss they have suffered due to an alleged mistake or negligence in the work you have produced for them.
Unlike Employer’s Liability Insurance, Professional Indemnity Insurance is not a legal requirement. Yet it is often stipulated as a mandatory requirement for members of professional bodies and by some regulators. PI Insurance is usually required by contractors before they can be deemed eligible to undertake a client’s contract for work.
Many professionals will need this type of insurance in order to join their respective professional bodies. Some clients may demand that their freelancers and contractors have professional liability insurance to cover the value of your work.
You could be liable for thousands of pounds if you offer advice or a service which leads to your client losing money.
If you undertake any of the following business activities, you should consider carrying professional indemnity insurance to ensure you and your client are protected:
PI Insurance provides cover for legal costs and expenses incurred in defending a claim, as well as compensation and costs that may be awarded due to:
The limit of indemnity you need will depend on the work you do and the level of risk. Some factors to take into consideration include:
As your business grows you can extend the level of cover needed.
If you need professional indemnity insurance for a specific contract, it is typical for the minimum amount of PI insurance required to be stated in the contract. Also, this is often the case for regulatory and professional bodies, so it is important to check the minimum insurance you need before arranging cover.
You can find out more about PI Insurance by calling our friendly team on 0333 321 1403. Caunce O’Hara are experts for professional indemnity insurance for freelancers and contractors and our team will be happy to help you with any questions you have.
Caunce O’Hara & Co Ltd have been awarded the Feefo Platinum customer service award in 2022, 2021 and 2020.
The company was the winner of the General Broker of the Year award in 2009 and 2010 at the Manchester Insurance Awards.
Caunce O’Hara won the Most Effective Use of E-business in 2007 at the UK Broker Awards.