A guide to professional indemnity insurance
If your business is looking to find out more about professional indemnity insurance, our useful guide will help. Whether you are looking for the professional indemnity insurance definition or the best price for your policy, we will help.
What is indemnity insurance?
One of the most common questions business owners ask is 'What is professional indemnity insurance?'
Professional Indemnity insurance is designed for businesses that provide professional advice or services. It helps to protect you against potential negligence claims by clients or customers. It is always advisable to take out Professional Indemnity (PI) insurance if you give professional advice to customers or deal with sensitive or confidential data.
If your business provides a product or service, there is a chance that your customers may need to claim against you. For example, if they suffer a loss as a result of an error, negligent act or omission made by you. However unlikely, if a client claims against your business, indemnity insurance will provide the protection you require.
What are the benefits of professional indemnity cover?
Professional Indemnity insurance, or PI insurance, will cover financial loss to a third party resulting from a negligent act, error or omission on your behalf. There are different levels of cover to choose from. The types of claims that are covered include;
- Negligence - If you offer incorrect professional advice or make a mistake.
- Defamation – If you support or make statements defaming your client.
- Breaching confidence – If without permission you share sensitive information.
- Breaching copyright – If your business infringers copyrights, intellectual property or trademarks.
- Damaging or losing documents – If you damage or lose important client documents.
- Employee cover – If an employee of your business commits a malicious act which results in a loss for your client.
- Court attendance – Any costs associated with you or your employees attending court in relation to a claim.
- Advertising – If your business makes a statement which cannot be substantiated.
Do I need professional indemnity insurance?
You may be wondering exactly who needs professional indemnity insurance, as it will depend on the type of industry you operate in. In general, if your business offers services of advice to its customers, you would benefit from the protection of indemnity insurance. Examples include, consultants, solicitors, architects, advisors, accountants and designers. Although, it isn't a legal requirement to take out cover, you will benefit from peace of mind.
Depending on your profession, there are some regulatory bodies which may require your business to hold a professional indemnity policy. There are some industries where individuals within the business need to arrange their own cover, so it is always advisable to check. For example, if you are a doctor or nurse working for the NHS, the practice may not arrange insurance.
In reality every business which provides a professional service could be subjected to a claim, if the service does not meet client expectations. Every claim will impact the business in terms of disruption and cost, regardless of whether the claim is substantiated. Even if the claim is not upheld the cost of defending your business can be very high, if no professional indemnity insurance is in place.
If PI cover isn't a mandatory requirement for your business, it is worth bearing in mind that mistakes can be made. Regardless of how careful you and your employees are, it is always possible that a mistake could be made, leading to an expensive claim. To ensure your business is protected against the financial burden, we always advise arranging an adequate level of cover.
What level of professional indemnity cover do I need?
The majority of insurers offering professional indemnity cover offer policies of £50,000 up to £5 million. The exact amount you will require will depend on your profession, contracts, project values and any professional bodies.
There are certain professions which require specific policies to be tailored to their roles, such as engineers and accountants. Consider the overall value of your services, this will help you judge the cover you require. You should also take a look at any business contracts, as they may state a minimum level of cover required.
It is also possible to arrange insurance which includes defence costs, solicitor fees, expert counsel and all other associated legal fees. These are factors which you should consider when deciding the cover your business requires. If you are unsure how much cover you need, many professions will have regulatory bodies which are able to offer guidance.
How much will professional indemnity protection cost?
The premium you pay will depend on a range of factors which are unique to your business. For example, a large business is likely to need to claim for a larger amount than a small business. This is because they will have more at stake if a claim is made, in terms of reputational and financial losses. The business will require a higher level of cover, resulting in a more expensive premium, when compared to a smaller company.
Another important factor will be the nature of the work you carry out, as there are different risks for different professions. If your industry is associated with a high level of risk, it is likely that the premium will be more expensive. However, our team are here to help your business find the best price for your insurance requirements.
How to find the best professional indemnity cover quote
Here at BusinessComparison we help you find the best deals, whether you are looking for business loans, bank accounts or insurance. To help you find the most competitive price for your professional indemnity insurance, we have developed a quick online form.
We can help you arrange cover up to £5 million, with an array of options available, such as excess protection. All we need to know are a few key business details such as the type of business you operate and how long you have been trading. The price for insurance differs between each business, as there are many factors which influence the quote. Our quick form is designed to capture the key details, so that you receive the best price for your insurance.
As you complete the online form, if you find that your business does not fit the usual questions, we can still help. Simply contact our experienced team and we will contact the panel of insurers to arrange bespoke indemnity insurance.
There are many options available, so it is important to decide which level of cover your business requires. For example, you may decide that you want your policy to include excess protection or cover for any legal fees. If you have any questions about the various options available, our team are always available to help.
Our insurance team will then find the best price from the market leaders you trust, such as NIG, Axa, Aviva and Hiscox. We have exclusive access to deals and the most competitive premiums, so that you can arrange the cheapest insurance.
What are the benefits of comparing with us?
Comparing Professional Indemnity insurance with BusinessComparison offers many benefits, including:
- Competitive Premiums
- Exclusive deals
- Compare top insurers
- Cheapest deals available
- Insurance available with monthly instalments
- Cover up to £5 million
- Free Collateral Warrant checking service available from selected insurers (Design and Construct trades only)
We know that you are looking for a simple way to compare policies and arrange the best insurance cover. So, once you receive the best quote for your specific indemnity cover requirements, it is possible to buy the policy online. If paying for the full premium up front is not manageable for your business, it is possible to pay via monthly instalments.
Whether you are looking for small business professional indemnity insurance or large limited company professional indemnity insurance, we can help. Whatever your trade or business size, there are a wide range of cover options available to provide the protection you need. To find out more about business insurance or to find the best quote, please contact our team today.