What is Professional Indemnity Insurance?
Does your business primarily involve offering professional advice to clients? If so, you should take out Professional Indemnity Insurance Cover. This is used in the event that if a client is dissatisfied with the advice you have provided, the client ultimately holds you liable.
A common example of this is where a firm holds their Accountant liable for a significant loss, due to a miscalculation on the Accountant’s part. If the Account has Professional Indemnity Insurance, they could be covered for the sum of the compensation and the legal costs incurred as a result of the claim.
If an Architect designs a blueprint for a new set of office buildings for a client and the building is later found to contain design flaws which result in the building being demolished, the Architect could be liable for the design faults. Professional Indemnity Insurance would be important in this case.
Another example of where Professional Indemnity Insurance could come into play is where a Plumber bursts a pipe while doing a job, the Plumber could be held liable for resulted damage caused to the property.
Do I need Professional Indemnity Insurance?
You are not legally obliged to take out Professional Indemnity Insurance but it is definitely advised as it could potentially save you massive amounts of money in the event of a claim and thus protecting the stability of your company. If you work in any of the following occupations, you should take out Professional Indemnity Cover;
- Computer Consultants
- PR & Marketing Agencies