Professional indemnity insurance (PI) protects your business against client or third party claims of negligence or mistakes made during the course of professional duties, which result in the third party’s loss or damage.
These claims have the potential to be financially crippling in the absence of suitable insurance cover, so it isn’t difficult to see why indemnity insurance is compulsory for most professional businesses offering professional advice and services.
PI will cover your legal costs and any settlements of such claims. Accountancy firms, IT consultants, journalists, architects, financial advisors and engineers all usually require it.
Professional indemnity is a specialist area of insurance, which requires advice from a suitably experienced insurance broker. Therefore you should be prepared to offer more information prior to deciding on a policy, compared to other insurance policies, due to the variety of risks associated with the above professions.
For this reason, it is important that you choose a provider who can offer a flexible approach to meeting your insurance needs, such as Markel. Markel Direct, providers of professional indemnity insurance offer specialist policies to suit a range of professions, professional practices and consultants of all business sizes.
It is the norm for businesses to take out multiple types of insurance to keep themselves safe from risks such as negligence, intellectual property, loss of documents or data and dishonesty.
However, many of these businesses are leaving themselves exposed to these in purchasing PI policies without checking whether the level of cover they’ve bought is in line with the insurance requirements of the work they are doing.
In addition, some businesses consider bringing their level of cover back down again following completion of a project to reduce their premiums, despite the fact that potential liability can extend for some time after the notional end of the contract.
This means that if it is reduced and you are subsequently sued, you will only have the protection of the reduced level of cover. In the event of a claim in this scenario, any saving you may have made on premiums will be worthless and you will have to foot some of the bill yourself.