What is Professional Indemnity
Professional indemnity insurance is an important type of business insurance, especially for businesses that give advice or provide a professional service to clients. It can cover compensation claims if a business issued by a client for making a mistake that leads to financial loss.
If you are alleged to have provided inadequate advice, services or designs to a client, professional indemnity insurance provides cover for the legal costs and expenses in defending the claim, as well as compensation payable to your client to rectify the mistake.
It’s important that you feel confident in the quality of your work, but even with the best intentions accidental errors and disputes over quality can happen. If they do, professional indemnity insurance can help to protect you if claims are brought against you by a client. Everpro Consultants will help to put mistakes right and cover any legal costs.
Do I need Professional Indemnity Insurance?
The businesses that usually decide they need professional indemnity insurance (sometimes called PI insurance) are those that give advice, offer a professional service, or handle client data or intellectual property. It’s therefore important for many business types, from accountants to architects.
Some professional bodies or regulators demand that their members or the businesses they regulate hold professional indemnity insurance. This applies to solicitors, accountants, architects, chartered surveyors, financial advisers, and some healthcare professionals. Other businesses will decide to take out a policy anyway, to protect them financially and help them win contracts. After all, in many cases, clients will only do business with you if you are properly protected. A good professional indemnity policy helps to provide you and your clients with peace of mind.
Professional indemnity insurance can cover compensation payments and legal fees if a client makes a claim against you. The compensation payment will usually take into account the financial loss that the client has suffered. Imagine, for example, that you are handling client data, but you or an employee copies the wrong person in an email when sending on the data. Your client sues you for breach of confidentiality. In this case, your professional indemnity insurance could pay for the cost of the compensation claim, along with legal expenses.