Why do you need it
Professional Indemnity (PI) insurance covers the cost of compensating clients for loss or damage resulting from negligent services or advice provided by a business or an individual. If you offer your knowledge, skills or advice as part of your profession – either as a self-employed individual or for a company, you should consider taking out PI insurance.
Many professions need to have PI insurance as part of their respective industry body’s regulatory requirements. Even if you are not obliged to have PI insurance, without it, you could be liable for thousands of pounds worth of legal fees and compensation payments – not to mention lost income from the time spent defending any allegation.
You are likely to need professional indemnity insurance if:
- You provide advice or professional services to your clients (including consulting or contracting)
- You provide designs to your clients
- You work as a contractor, consultant, freelancer or self-employed professional, and your client has requested you arrange professional indemnity insurance in order to undertake a contract
- Your industry association/regulatory body requires you to have it
- You want to protect against allegations of mistakes or negligence in work you have undertaken for your client
Professions that might need professional indemnity insurance include (but are not limited to):
- Management and business consultants such as marketing consultants, training consultants and education consultants
- IT professionals including IT contractors, consultants, programmers and developers
- Recruitment agencies and recruitment consultants
- Designers such as web designers, graphic designers and interior designers
- Fitness professionals including personal trainers, dance teachers and yoga instructors
- Teachers and tutors including private tutors
What is covered
The PI policy will pay for:
Defence costs (legal fees)
Awards, judgements & settlements
PI insurance is provided on a claims-made basis. This means that claims are only covered if they are made while the policy is in effect or within a contractually agreed extended reporting period, irrespective of when the event giving rise to the claim occurred.
Limits & Policy
Limits available up to GBP 2,500,000
Access to a dedicated legal helpline to assist with legal issues
Logistics company sued by a competitor for copyright infringement and intellectual property theft relating to their business model and their website. Insurer paid £170,000.
Consultants Design Error
Fuel economy consultants were allegedly negligent in their design of heating and lighting for a factory. Substantial remedial work was required, resulting in a claim for £600,000.
Defective Rent Review Notice Costs Estate Agent
An estate agent who missed the opportunity to carry out a rent review because of a defective rent review notice. The claim was settled for £50,000.