While professional indemnity insurance is not mandatory in the UK, it’s still important for certain businesses to consider taking it out alongside other key policies. This way, you’re ready for any situation, especially if you make a mistake in a client’s work or provide the wrong advice and have, because of this, to pay for damages.
As insurance brokers in Bolton, we’re taking a look at the benefits of professional indemnity insurance and what it actually covers, helping you to decide why you should purchase it. Don't hesitate to call us on 01204 565600 if you’d like more information on this type of insurance.
To put it simply, this policy ensures you don’t have to pay out of pocket if you’re sued for mistakes that affect your client, breach of contract, negligence, etc. If your customers lose money or their reputation suffers because of advice you’ve given, for example, you’ll want to be covered in case they sue you.
This is where professional indemnity insurance comes in. You may want to take out anything between £50,000 and £5 million, depending on factors like your contract and the value of your work. If you’re unsure how much cover you need, let us help.
IC Insurance specialises in finding the right insurance for your business, so you’re not paying more than you need and have all the coverage you require if something happens.
You may wonder whether taking out professional indemnity insurance is really necessary and may even opt-out in favour of other policies.
However, if you offer advice to clients – as well as your skills – handle customers’ personal and confidential information, create materials that could breach intellectual property rights, and offer professional services of any kind (such as graphic design), you might want to reconsider.
It only takes a small mistake or the wrong recommendation, and your clients may sue you for damages if their business suffers. By taking out professional indemnity, you’ll be protected if the worst happens and also get peace of mind when you’re running your day-to-day.
So, if you’re an IT professional, a consultant, a designer, a personal trainer, a tutor, a contractor, an engineer, an architect, and so much more, you should get professional indemnity.
But what are the benefits of choosing this policy for your business? There are many reasons to take it into account, mainly because professional indemnity covers a wide range of issues. These include negligence, defamation about individuals or a company, breach of copyright and trademarks and breach of confidence.
You can also get cover for the costs of going to court if it comes to that and for work done on your behalf, which is often the case with subcontractors. With this policy, you can also be protected if you lose important documents your customers entrusted you with.
And, if you have employees, not only should you take out employers’ liability insurance, but professional indemnity can help you if a member of staff does something malicious against a client.
A reason why some people opt not to take out professional indemnity insurance is because they believe it’s too expensive and they may not need it in the end. However, by using brokerage services, such as those provided by IC Insurance, you can rest assured that you’re not overpaying for your policy.
We've built strong relationships with many insurers over the years so that we can present you with many options suitable for your business – all at competitive prices.
In general, the cost of professional indemnity is based on factors like the size of your business. For example, if you’re a small business owner, you’ll likely pay less than someone with a large company since they stand to lose a lot more money.
In addition, the type of venture you run is also crucial to decide the cost. This is because some businesses are considered more hazardous than others; higher risk ventures will probably pay more in insurance.
Your level of experience may also come into play. If you’re new to the business or haven’t worked in your industry for a long time, for instance, you may have to pay higher premiums. Insurers look at things like your qualifications, the way you’ve structured your venture, the risk management you do, and so much more.
What's more, it’s important to note that the value of your contract is key in how much you pay for professional indemnity. You may only charge a percentage of the total value of a project but, if there’s a chance that a mistake you make can halt everything (or even collapse the project), then you may have to get a high amount of coverage to protect yourself in the event the worst happens.
If you end up having to pay damages to a client, you might find yourself struggling to keep your business afloat, be it because you can’t afford the bills anymore or can’t pay your employees’ wages – but professional indemnity insurance will remove that worry and keep your business from going bankrupt. We include professional indemnity insurance in a number of our policies, such as small business owners insurance, as standard. Often, it will be specific to the type of policy you are taking out, so for example our care home insurance policies include medical malpractice - a form of professional indemnity insurance for staff in care and medical settings. You can count on us to get you the level of cover you need.
Peace of mind is priceless, so speak to us today for a FREE, no-obligation quote or to ask us any questions you may have about this type of cover (or any other insurance we can broker for you).