What is professional indemnity insurance?
What is professional indemnity insurance?
Professional indemnity insurance, also referred to as PI insurance, is a type of business insurance that covers you for costs if you make a mistake in a piece of work for a client that causes them financial or reputational loss.
Do I need professional indemnity insurance?
Do I need professional indemnity insurance?
From consultants and accountants, to designers and recruiters, professional indemnity insurance is important for many business types. It might be needed by a self-employed person like a consultant or an accountant, or by a company doing certain types of work. Businesses that might benefit from PI insurance are those that:
Give advice to clients
Offer a professional service
Handle client data or intellectual property
What does professional indemnity insurance cover?
What does professional indemnity insurance cover?
Professional negligence
If you give incorrect advice or make a mistake
Defamation
If you produce or support libel statements about your client
Breach of confidence
If you share sensitive information without permission
Breach of copyright
If you infringe on copyrights, trademarks or intellectual property
Lost or damaged documents
If you lose or damage documents while they’re in your care
Employee cover
If an employee commits a malicious act that causes a loss for your client
How much professional indemnity insurance do I need?
How much professional indemnity insurance do I need?
Most insurers offer between £50,000 and £5 million in terms of cover. To get a good idea of how much you’ll need, check:
Your business contract
The value of your project
Professional or regulatory bodies
How much does professional indemnity insurance cost?
How much does professional indemnity insurance cost?
Insurers will set your premiums for professional indemnity insurance based on factors such as:
Size and type of business: Bigger businesses generally have more at stake when it comes to financial and reputational losses, so you’ll generally need higher levels of cover if your client is a big company
Nature of the work you do: If your business faces high levels of risk, then insurers are also likely to charge more in premiums
Business insurance comparison: You can use a comparison tool to compare business insurance quotes. MoneySuperMarket has teamed up with Simply Business to help you compare personalised business quotes and make sure you’re properly covered.
Compare business insurance quotes from UK insurers such as:
Is professional indemnity insurance required by law?
If you work in certain professions, regulatory bodies might require that your business has professional indemnity insurance, however, it isn’t strictly a legal requirement.
Is professional indemnity insurance tax deductible?
Yes, as it can be classed as an ‘allowable expense’.
What other types of insurance can I get for my business?
● Public liability insurance: If any work carried out causes injury or property damage
● Professional indemnity insurance: If a client decides your work or advice is inadequate
Do I need professional indemnity insurance if I work from home?
Professional indemnity insurance is not premise based so it doesn’t matter where you’re working, if you’re offering advice then you need PI.
What other types of insurance can I get for my business?
You’ll also be able to add any of the following policies to your overall business insurance:
● Public liability cover: Public liability insurance covers your business for the cost of any compensation claims you might face if someone becomes ill or injured, or has their property damaged as a result of the work you do
● Employers’ liability cover: Employers’ liability insurance covers legal costs resulting from an employee becoming ill or injured, or having their property damaged as a result of your business
● Product liability cover: Product liability insurance protects you against the cost of legal fees resulting from someone becoming ill or injured, or having their property damaged by a product you sell – which you may be liable for even if you didn’t manufacture it
● Business interruption cover: Business interruption policies cover you for lost income if the running of your business is interrupted by an insured event such as a fire or flood
● Business buildings cover: Also known as business property insurance, this covers you for the cost of any damage done to your premises resulting from an insured event
Business interruption insurance after the coronavirus outbreak
Any new business interruption policies sold won’t cover claims resulting from events that are already taking place – so business interruption claims related to COVID-19 are unlikely to be successful.
How can I compare business insurance deals?
Comparing business insurance deals with MoneySuperMarket and Simply Business is the easiest way to find a cheaper quote for your company. Just give us a few details about your business and employees and we’ll show you a list of quotes tailored to your requirements.
You’ll be able to compare deals by their overall cost, the cover you’ll get and any extra policies you can add to your overall business insurance. Once you’ve found the provider and quote you want, just click through to the provider to finalise your purchase.
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