Professional Indemnity
As a business owner, you want to protect your business in as many ways as you can. Professional indemnity insurance, also known as PI insurance, covers you should a client or customer claim that your service, advice or design is inadequate, is not as expected or resulted in financial loss for the client. It would cover any legal costs and other expenses incurred in your defence, as well as damages or costs that may be awarded to your client.
Do I need professional indemnity insurance?
Many professions need to have professional indemnity insurance as part of their respective industry body’s regulatory requirements. These include:
- Accountants
- Architects
- Chartered surveyors
- Counsellors
- Some therapists
However, even if you are not obliged to have PI insurance, without it, you could be liable for 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 (such as working as an architect or design engineer)
- You want to protect against allegations of mistakes or negligence in work you have undertaken for your client
- 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.
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
- Technical and engineers contractors including CAD designers, project engineers and offshore oil and gas engineers
- 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
