Professional Indemnity Insurance: Can You Explain It To Me Without The Jargon?

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Professional Indemnity Insurance: Can You Explain It To Me Without The Jargon

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Imagine that you make a mistake, you get something wrong, or you forget to do something you should have done (and however conscientious you might be, you can't really pretend that you never do any of those things).

Now let's suppose that your error results in a financial loss to one of your clients. The client wants to recover that loss and sues you.

Professional indemnity insurance (or pi insurance as it is often referred to) will cover you for all the legal costs and, if the case goes against you, for any compensation award made, up to the policy limit.

That, in a nutshell, is what professional indemnity insurance is. And why it is so important for individual freelancers and consultancy firms.

Obviously the types of mistake that professionals might make vary from profession to profession (which is why it is essential that any professional indemnity policy you take out is designed, specifically, to provide cover for your profession). But typically, your policy will protect in the event of:

a negligent act or omission (sometimes referred to as a breach of a duty of care)

inadvertent infringement of copyright or intellectual property rights

unintentional breach of confidence

loss of a client's data or documents

dishonesty of your employees in relation to a client

So, for example, an Engineer might make an error in his calculations, a Graphic Designer might accidentally incorporate copyright material in a design, a Management Consultant might unwittingly reveal sensitive client information to a third party, an IT Consultant might permanently delete a database.

Events that can easily happen. Events that could have significant financial consequences for a client. Events that could bankrupt you if the client takes legal action unless, of course, you have professional indemnity cover.

And it couldn't be easier to arrange. Just follow the link to get the professional indemnity insurance you need.

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