Professional indemnity insurance is not usually the first thing that comes to mind when you’re a business owner. Deadlines and budgets are a fact of life and when you’re in a rush to get a job done, professional indemnity can often fall to the bottom of the priority list.
However mistakes can happen at any time – mistakes that could potentially lead to you being held financially accountable for causing damage or loss to your clients. This in turn could result in huge claims being made against you.
Who might want Professional Indemnity insurance
Some professionals including architects, accountants, engineers, estate agents, IT consultants and contractors may be required to have insurance as a regulatory requirement of belonging to a guild or trade association; however for most businesses it is not a legal requirement.
Professional indemnity insurance may also be considered by a range of other professionals including consultants, designers, and members of PR and advertising firms. While professional indemnity is not necessary for some of these professions, many companies treat it as essential due to the financial protection it could provide in the event of a claim.
Although professional indemnity insurance is not a legal requirement, when bidding for a contract, some companies including those found in the public or local governmental sectors may insist on working with businesses that have professional indemnity insurance cover in place. You may want to consider this if you intend on tendering for work/opportunities.
Things you may want to consider
Professional indemnity insurance is quite unique in that it is generally underwritten on a claims-made basis. This means that a policy must be live when a claim is issued against you. So, if your contract finishes and you cancel the policy, you will not be covered for the work you have done.
When taking out a new policy, many insurers can include a retroactive date with their professional indemnity policy, which covers for work completed during that period i.e. if you have two years retroactive cover, you will be covered against claims connected with work you’ve carried out during the previous two years. This may be an option for you, especially if you have undertaken a lot of high-risk work in the past.
This guide aims to highlight some of the ways a professional indemnity policy can work for you or your small business. While professional indemnity may be compulsory insurance for some businesses, for others it gives significant peace of mind. Ultimately, by preparing for a number of legal eventualities, you may consider it as another way of looking after the long term future of your business.
If you are unsure of whether you require professional indemnity insurance please don’t hesitate to contact the constructaquote.com team, who can supply you with additional information and provide you with a competitive professional indemnity quotation.
Please call one of our insurance executives on 08081686868.