What is Professional Indemnity Insurance?
Professional Indemnity (PI) Insurance can protect your business against compensation sought by a client who alleges that your advice or services have led to a financial loss. More importantly, PI Insurance provides the legal costs involved in defending such claims.
If your business provides professional advice and consultancy to customers, then PI Insurance is highly recommended and indeed for some professions, including solicitors and financial advisors, PI Insurance is a legal requirement.
PI Insurance means that you will be covered for the legal costs and expenses in defending a claim, as well as compensation payable to your client to rectify the mistake.
When can this cover help me?
Mistakes can happen across all types of businesses varying in severity. For example, an Estate Agent under-sells a property and the client opens a claim for difference in sale value.
In these circumstances a claim for negligence could be lodged, and you will need to be able to afford to defend yourself; and if you lose, pay any costs and claims. If you don’t have PI Insurance, you could find that the costs and compensation due after a claim could put you out of business.
What does PI Insurance cover?
PI Insurance is designed to cover compensation to the claimant if you are found to have been at fault. You should also have cover for any damages awarded including legal costs.
The cover under PI Insurance can vary from insurer to insurer so it is important to get advice so you are sure that you do have the cover you need for your business. Typically cover can include:
- Loss of documents or data
- Confidentiality breaches
How much PI Insurance will I need?
This will depend on factors such as the size of your business, turnover, number of employees and any previous claims. The minimum level of cover could be around £2m, but it may need to be much higher depending on your circumstances.
Lansdown Insurance Brokers are specialists in Block of flats insurance, Vineyard insurance and Business insurance. We are able to provide flexible policies to suit individual client needs and provide advice on what Professional Indemnity cover is needed. For more information call the team on 01242 524498.