9 things you need to know to protect your business
- What is Professional Indemnity Insurance?
Professional Indemnity Insurance protects sole traders and businesses who give advice and provide design or specification. - What does it actually cover?
Professional Indemnity Insurance covers you against losses for claims made by a client or third party where you make mistakes or are found to have been negligent in some or all of the services you provided. - Maybe an example would help...
If a solicitor gave advice to your business but this advice turned out to be incorrect and you lost an important contract you would want that solicitor to compensate you. - What about legal costs etc?
Professional Indemnity Insurance will also cover your defence and legal costs and potentially the claimant’s legal costs as well as their losses so you should factor these in to the amount of cover you need. It can take a long time to settle some claims. Even spurious claims can incur legal costs and Professional Indemnity Insurance will cover these. - What's the difference between Professional Indemnity and Public Liability?
Put simply Professional Indemnity Insurance provides cover against people who may have lost out because of your advice, design or specification. Public Liability insures you against claims made for damage to property. Click here to read more on the differences between PII and PL. - Is it the law to have Professional Indemnity Insurance?
Some professions are required by law to have Professional Indemnity Insurance including solicitors and insurance brokers (yes, we still have to insure ourselves!). Other businesses may have to have cover as part of their industry authorisation (i.e. Surveyors must prove cover to be a member of RICS). Even if it's not law it's recommended that consultants and contractors have insurance. - What else?
Any business should also insure its other risks... Employers Liability is a legal requirement for any business that employs persons, even if they are temporary or non-paid. Public Liability is also recommended to protect you against claims for damage. - What I can do to protect myself and my business?
The first step to minimising claims is to keep good records, document projects and meetings and be clear about responsibilities with your clients. - Where can I find out more?
This can be a complicated and specialist type of insurance for some businesses. You can read some more information about Professional Indemnity Insurance and other business insurance on businesslink.gov.uk.
If you're not sure about an aspect of your cover you can take advice from an experienced
insurance broker such as Jelf Professions. Give us a call to talk through your business and
insurance requirements or quote online now.
