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What is Professional Indemnity?

Professional Indemnity (“PI”) insurance is an insurance package designed to protect business offering professional advice or services. Professions that often require Professional Indemnity Insurance include: Consultants, Web/Graphic Designers, Bookkeepers and Advertising Agents.

What does it cover?

It protects against claims for "Business Injury" which means any financial loss that they suffer as a result of:

• Any negligent act, error or omission
• Implied Statutory Terms (e.g. Sale of Goods Act 1979, Sale of Goods and Services Act 1982 and other similar legislation as well as Common Law)
• Unintentional Infringement of Intellectual Property Rights
• Loss of Documents/Data entrusted to the insured
• Unintentional libel, slander, defamation
• Unitentional breach of confidence, confidential duty or misuse of information

Professional Indemnity will pay all reasonable costs incurred in the defence (i.e. legal fees) or settlement of such claims arising from the above.

How much does it cost?

Professional Indemnity premiums vary widely between professions. An environmental consultant will pay for more than a marketing or IT consultant for the same cover. Premiums start as low as £165 for £100,000 of cover in a low-risk profession. To get a quote for your business click here.

Who should consider Professional Indemnity cover?

Anyone involved in providing professional advice or services. Examples include:

• Management Consultants
• Business Advisers/Consultants
• Marketing & Communications Consultants
• Market Research Consultants
• Advertising Agents
• PR Consultants
• IT Consultants
• IT Companies
• Telecoms Consultants
• Graphic Designers
• Web Designers
• Training Consultants
• HR Consultants
• Authors/Writers
• Translators & Interpreters
• Office Services/Bookkeepers
• Health & Safety Consultants

Other professionals who give advice (e.g., Architects, Engineers, Surveyors, IFAs, Accountants) should also carefully consider PI cover. Because of the nature of risks in these professions, insurers often require more information than the professions above. Be prepared for this!

Things to watch out for

• When you are covered Many businesses are required to carry cover under the conditions of a contract. However, PI should NEVER be purchased just for the duration of a contract. All PI is written on what's called a "Claims Made" basis - i.e. it's the policy you have in force when the claim is made that pays out, rather than the policy you had when the work was carried out. So, if you complete your contract and you drop your PI cover and a claim comes in subsequently - NO COVER. Basically, if you take out PI it's a long-term commitment.
  
  
• Compare quotes carefully For those people looking "around the market" for quotes they should ensure that the quotes they receive are on a "like for like" basis. All PI policies should carry the minimum cover (as described above) but many professions require additional cover found under policies especially designed for them. Watch out for Limits of Indemnity (whether they are "any one claim" or "in the aggregate") and excesses as they can vary from Insurer to Insurer
  
  
• When changing insurers For those who already have PI and are changing to new insurers you MUST ensure that the new policy has "RETROACTIVE COVER" built in to cover work carried out in the past.
  
  
• Premiums are increasing A general note on the PI market - PI has never been cheap and premiums are increasing rapidly. There are also fewer insurers than there were 12 months ago and those that remain are becoming more selective about the risks they take on and are significantly increasing their premiums for those that they do.

Get a quote

To find out how much it would cost for your business to have Professional Indemnity cover, click here.

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