If a third party suffers an injury, loss, or property damage as a consequence of another’s professional actions there may be legal liability for compensation to the third party. Professional indemnity (PI) covers the insured against their legal liability to compensate clients for injury, loss or damage due to a breach of duty in the conduct of their profession.
- Mistakes can happen – No matter how hard you avoid mistakes and give the best advice possible, mistakes can still happen, leaving your company open to large legal costs and compensation claims. Negligence is a core cover for PI and provides protection against allegations.
- It may be compulsory – For many professions, such as chartered accountants and chartered surveyors, it is a regulatory requirement to have PI insurance in place. Not having this cover could result in your business being stripped of its regulated status.
- Intellectual property – Unintentionally producing materials which infringe intellectual property rights, for example using online images without the owner’s permission, could lead to litigation. PI can protect a company against legal costs and compensation.
- Contractual requirements – It is becoming more common for clients to request that PI cover is in place before a business relationship commences. Having PI gives clients confidence that your business is run professionally.
- Reduce vulnerability – Every time a professional gives advice or offers a service for a fee, they are potentially vulnerable. From SMEs to large corporations, lacking PI insurance could leave a company’s financial position exposed.
- Handling clients’ information – Even with adequate data protection and policy procedures, data can sometimes accidentally get lost. PI can cover the cost to replace or restore any damaged, distorted, erased or mislaid documents including electronic or digitised data.
- Employee negligence – Even with extensive training for all staff, the way employees carry out their work is ultimately beyond a company’s control, which could leave the company exposed to liability claims. PI cover gives peace of mind in the event of an employee’s negligence.
- Duty of care – Professionals may owe a duty of care to anybody who relies on their service or advice. In today’s world, clients expect high standards of service and are more inclined to resort to litigation when these standards are not met. PI insurance would provide protection against such claims.
- Peace of mind – There can be a lot to consider when running your own business. PI cover takes away the legal and financial worries should a PI claim arise to ensure businesses continue to operate as usual.
- Defamation cover – PI will provide cover against an accidental lapse in judgement which results in a defamation claim. For example, sharing information via social media which could be perceived as negative or slanderous.
Independent Insurance Services can help with your PI needs – contact us for a quote.