What is Professional Indemnity?
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.
How is Professional Indemnity Calculated?
Rates for this insurance generally range from 0.25% up to 5% of fee income or annual turnover, depending on the usual risk factors and market competition. But rates can also be higher or lower than this. Minimum premiums will also apply which will vary between insurers.
How do I claim Professional Insurance Indemnity?
Insurance + Risk Services
- 5 important tips for claiming on your Professional Indemnity Insurance.
- Duty of Disclosure – if in doubt notify the insurer!
- Include ALL Insured names.
- List and update ALL of your professional services.
- Ensure your PI policy covers Vicarious Liability.
- Continuity / Continuous Cover Clause.
Who should take out professional indemnity insurance?
Professional indemnity insurance is not only designed for traditional professionals who provide advice or a service to their customers. It is also for anyone who is an expert in a particular field and whose expertise and advice the public might rely on, for example, an IT expert.
Benefits of Professional Indemnity Insurance?
Financial Protection
The most important benefit of PI insurance is the financial safety. Insurance can be a financial lifesaver as claims can be extremely expensive to any business. The cost of resolving a claim can ruin and, in some cases, shut down a business. Therefore, the insurance will reimburse expenses such as legal fees, defence costs and compensation.
PI insurance is there to help your business through tough times and help you face the claims in the best professional way.
Credibility
Professional indemnity insurance gives your business a stronger and more trustworthy brand image. More businesses want to work with companies that are covered by PI insurance. Businesses feel confident knowing that you are covered if things go wrong. It assures your clients and investors that if some shocking claims arise, professional indemnity insurance is there to provide strong support and will not affect them indirectly.
This benefit of PI insurance is crucial, especially for freelance professionals that aim to work for big businesses. For example, a personal trainer who part-time trains clients at a gym.
Saves Time
Another benefit of PI insurance is how it can save time and avoid a complete pause. Professional indemnity insurance allows businesses and professionals to continue with their business duties. In addition, the insurance makes it easier to face claims and provides professional support to make the process quick.
Dealing with claims or lawsuits is essential, but it doesn’t mean everything else should be interrupted. The insurance allows you to move on from the claim without any business damage.
Professional Reputation Protection
Much like credibility, PI insurance helps protect the professional reputation when faced with a claim. Claims can ruin a business reputation instantly if not dealt with quickly and professionally. The insurance ensures that the business hires the best legal team and advises how to best face the claim.
Although this is if the business negligence were accidental, no insurance would help if a company’s negligence actions were on purpose and the business was at fault.
Peace Of Mind