Professional Indemnity Insurance

Many professional businesses run the risk of suffering a financial and professional disaster without the invaluable protection that Professional Indemnity insurance (PII) provides.

Traditionally, only businesses such as Accountants, Surveyors, Engineers, Solicitors and Architects, the mainstream professions, were regarded as ‘professionals’ and obtained professional indemnity insurance.

Today, more businesses rely on services provided by others and the increased use of outside consultants and contractors has widened the scope of this term; therefore nowadays a ‘professional’ is often regarded simply as any person who offers a specialist advice or service.

What type of business needs Professional Indemnity Insurance?

As well as the usual professions holding professional indemnity insurance, many others either feel exposed or are required to hold professional indemnity insurance by their clients. These include builders and others in the construction industry, manufacturers, property managers, estate agents, marketing consultants, designers, IT consultants, management consultants and even feng shui experts! And so the list grows every day. See the bottom of this page for a list of common professions requiring professional indemnity insurance.

What Professional Indemnity Covers

Most Professional Indemnity Insurance policies can provide you with the following covers:

• Breach of professional duty
• Defence costs
• Libel and slander
• Loss of documents
• Dishonesty of employees
• Fidelity
• Unintentional breach of confidence
• Infringement of copyright and intellectual property rights
• Previous firms or previous partners

You may need professional indemnity insurance if you…

• provide advice to your clients
• handle data belonging to a client or business
• are responsible for a client’s intellectual property
• provide a professional service and could be challenged on your work. You may feel confident in the quality of your work, but any small business is vulnerable to a claim of negligence when professional advice or services fail to meet a client’s expectations and cause financial loss.

Consequently, if you are a professional who gives advice and/or a professional service you should consider Professional Indemnity insurance. In the absence of adequate professional indemnity insurance a large successful claim could cause you personal bankruptcy or the insolvency of your company.

Even limited liability companies have balance sheets to protect and nobody wants to lose a business that they have worked hard to build. Professional Indemnity is therefore a must.

Professional Indemnity is a ‘claims made’ basis policy

One important aspect to bear in mind when considering professional indemnity insurance is timing. There can often be a long delay between an event and a subsequent claim so you need to be covered both at the time of the event and when the claim is made. It is the professional indemnity policy effective at the time of the claim which responds (known as a ‘claims made’ policy) but a Professional Indemnity policy must have been in place when the breach of professional duty was alleged to have taken place, although retrospective professional indemnity cover can easily be arranged.

It also means that if you plan to cancel your professional indemnity policy when you close your business or retire you may need to arrange “run off” cover for a period of time afterwards.

Precautions

One way to minimise professional indemnity claims is to make sure projects are well documented. Ensure that you set out specific responsibilities in your contracts with clients beforehand and deal with complaints promptly. Client “sign off” at critical stages in a contract can be very useful and is evidence of good housekeeping within a business.

Request a Professional Indemnity Quote Today

We can offer advice and guidance on this specialist area of insurance and arrange the most suitable professional indemnity cover for you and your business. We have access to a wide range of Professional Indemnity insurers and therefore quotations are available relatively quickly.

For quotations please contact:

Gary B Baxter Dip CII

Corporate Account Manager
Direct Dial: 01253 598957
Mobile: 07904 546274
Email: gary@rowlands-hames.co.uk
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John A Isles ACII

Managing Director / Head of General Insurance
Chartered Insurance Broker
Direct Dial: 01253 598953
Mobile: 07974 667825
Email: john@rowlands-hames.co.uk
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List of current professions seeking Professional Indemnity (not exhaustive!)