What is Professional Indemnity Insurance?
Professional indemnity insurance protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered.
Compensation claims can be brought against you even if you provided a service or offered advice for free.
Professional indemnity insurance covers the policyholder for the costs of legal action made against them in respect of financial loss which occurs due to the negligence, error, or omission in professional advice or services provided by your business.
What does a professional indemnity insurance policy cover?
Professional indemnity insurance covers the policyholder for the costs of legal action made against them in respect of financial loss which occurs due to the negligence, error, or omission in professional advice or services provided by your business.
Do I Need Professional Indemnity Insurance?
Many professions need to have professional indemnity insurance as part of their respective industry body’s regulatory requirements. Even if you are not obliged to have professional indemnity insurance, without it, you could be liable for fees and compensation payments. You are likely to need professional indemnity insurance if you:
Frequently Asked Questions
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Professional Indemnity Insurance provides cover for legal costs and expenses incurred in your defence, as well as any damages or costs that may be awarded, if you’re alleged to have provided inadequate advice, services or designs that cause your client to lose money.
Professional indemnity insurance covers the policyholder for the costs of legal action made against them in respect of financial loss which occurs due to the negligence, error, or omission in professional advice or services provided by your business.
You are likely to need professional indemnity insurance if you provide advice or professional services to your clients.
If someone sues your business and claims you made a mistake in the services provided, without coverage, you’d have to pay legal costs out of pocket.
Construction Professional Indemnity insurance is designed to protect contractors and sub-contractors in the event that claims are made against them for allegations relating to errors in their work, incorrect designs or professional negligence, that causes their client a financial loss.
Traditionally, run off insurance would be maintained in this way every year for up to six years. Six years is the period many professional bodies require their members to carry run off professional indemnity insurance for, this is therefore a good benchmark to use for all professions.