What is Professional Indemnity Insurance and Do I Need It?
Professional indemnity insurance is not compulsory or obligated by law, but it could save you thousands or millions if you give professional advice for a living.
For any business or individual that consults or gives professional advice, it can be very valuable to have professional indemnity cover in case something does not work out as planned. For doctors, lawyers, financial advisors or anyone providing their expert opinion, whilst we always have best intentions, you could find yourself at the hands of a big lawsuit if the outcome of your advice turns sour.
Do you give medical advice? Do you give financial advice? Well, if one of your clients finds themselves in a worse position physically or financially, you may be held responsible and required to pay compensation or damages to the customer. If the stakes are high, you could owe millions – so having professional indemnity or PI cover is essential to cover your back.
Who is Professional Indemnity Insurance For?
Whether self-employed or part of your business, professional indemnity is for anyone who gives professional advice for a living, including but not limited to:
- Financial advisors
- Marketing consultants
- Medical professionals
- Risk assessors
In fact, for some industries, having PI cover is so vital that your governing body or employer will not let you operate without it.
How Much Does Professional Indemnity Cover Cost and What Is Included?
The price of policies may vary depending on your line of work and potential damages, but professional indemnity insurance with Get Indemnity™ starts from £322 per year or monthly fees of £26.83 – and will give you up to £1 million coverage.
You can also apply for up to £5 million, £10 million or £100 million worth of cover – and this will be priced accordingly.
What is Included in Professional Indemnity Cover?
Professional indemnity cover is essentially there as a back-up in case you have to pay any damages to a customer. But the overall fees can be quite significant. Especially if you are factoring things like court fees, legal fees, compensation paid out, time off work and business interruption.
In some cases, a bad lawsuit could bring your business to a halt, creating a bad public image and a real loss of income. In fact, you may need to use cover to pay for PR or rebranding to reshape your public image.
Whilst you may receive up to £1 million cover on your policy, you may find that this sum is necessary taking all expenses into consideration.
What Are Common Claims for Professional Indemnity?
- Defamation – where someone has spoken very publicly about you in a negative way, including newspapers, magazines or online.
- Negligence or dishonesty – this will cover you if a client believes you were not carrying out your work at a high level or with any awareness.
- Claims expenses – this covers against any legal costs for any claims made against you or your business
- Information security & privacy liability – this protects you against any legal issues as a result of data breaches or hacking that compromises client data.
- Intellectual property infringement – these are claims that your work is a copy of someone else’s
So The Question Is: Do I Need It?
If you operate in a highly specialist field where there is a lot at stake, then yes, you will need professional indemnity insurance.
Above all, those giving medical or financial advice where there is a lot to be gained or lost for clients – this would make you a good candidate for purchasing PI cover.
But remember, it is not a legal requirement, such as car insurance for employers liability, so if you are a small operation, you do not deal directly with clients or there are not huge things at stake for clients – you may not need cover in place or you could opt for a very cheap policy.