By Deepak Soni, Head of Direct Commercial at Hiscox
Professional indemnity insurance (sometimes known as PI insurance), offers cover against legal claims of negligence for professional advice or services that fail to meet a client’s expectations and leads to financial loss.
What does it cover?
It will offer compensation you might have to pay to correct a mistake, as well as covering legal costs if claims are brought against you.
Who needs it?
If you work in a professional services industry as a company or even a sole trader you may need PI if you :
• Offer professional advice
• Have responsibility for a clients intellectual property
• Manage data belonging to a client or business
You could be a website designer, for example, accused of breaching picture copyright for a client’s website; or a health and safety consultant accused of failing to pick up a problem in a health and safety audit which subsequently led to an employee injury at your client’s workplace. Having Public Indemnity insurance will protect you against claims, and can be a life saver for a small business.
Is it mandatory?
Some industry bodies require that businesses have PI insurance to be able to operate, e.g accountancy firms, lawyers, engineers and more. Many companies are also now requesting firms to have professional indemnity insurance if they are pitching for work, so if you work as a business consultant, management consultant or IT contractor you are likely to need PI.
How much does it cost?
Costs will vary depending on your circumstances, and policies can be tailored to your profession; so if you are a software developer you could include copyright infringement cover within your policy. The best way to get a clear idea on costs is to get a quote online or over the phone.
For more information visit : www.hiscox.co.uk/