PI INSURANCE: What Kinds Of Claim Do People Make?
PI INSURANCE: What Kinds Of Claim Do People Make
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It's a good question to ask. After all, if you're going to insure yourself against a particular risk, you want to know what that risk is. And professional indemnity insurance, whilst being one of the most important types of insurance for a freelancer, is possibly one of the least obvious.
In essence, indemnity insurance provides cover in the event that you cause a financial loss to a client through your professional negligence. And negligence can be construed in a number of different ways. To start with, in layman's terms, it can include good advice that you should have given but didn't; bad advice that you did give; actions that you should have taken but didn't; actions that you did take but shouldn't have. In more legal terms, these are often referred to as acts of error or omission' or a breach of a duty of care'.
For example, a web developer might make a coding error in a modification to an ecommerce site causing the site to crash. If the client can claim to have lost sales while the site was down, a legal action for damages might be brought against the web developer on the grounds of her negligence. Similarly, a structural engineer might face a similar prospect if, having made an error in his calculations, a load-bearing wall fails to pass an inspection resulting in a costly delay to the building project.
Incidents like these may seem fairly clear cut. But the scope of pi insurance stretches more widely still to cover unintentional breach of confidence and unintentional infringement of intellectual property rights. So, a freelance management consultant who revealed sensitive information to a third party causing damage to a client's reputation might be glad of his professional indemnity cover if the client brings an action against him. As might a graphic designer who inadvertently incorporates copyright material in her designs for a new corporate identity. Because in both cases, if the client can allege financial loss, legal action might very well follow.
Still the list goes on. Most professional indemnity insurance policies will also provide protection in the event that you commit an act of inadvertent libel or slander. And in instances where an employee of yours is found to have defrauded or stolen from a client without your knowledge.
So, as you can see, professional indemnity insurance is designed to cover a wide range of eventualities. And you can find the indemnity cover that is right for you by calling 0161 833 2100 or email info@freelanceinsure.co.uk
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