Do I need Professional Indemnity Insurance?
Professional Indemnity insurance, also known as PI insurance, provides insurance cover should any claims be brought against you by a client for errors or emissions in your professional service or advice.
In this increasingly litigious day and age, Professional Indemnity Insurance really is possibly one of the most important business insurances you can have. Indeed, Professional Indemnity Insurance can mean the difference between a business staying afloat and going under.
We would suggest that you consider Professional Indemnity Insurance if you:
• provide advice or offer a professional service
• handle data or any intellectual property
• are a professional, specialist or expert in your industry.
To provide some more clarity on this insurance, we’ve put together the following list of Professional Indemnity Claims that we’ve seen come through over recent years to illustrate just how vital this insurance can be for business professionals.
Professional Indemnity Insurance claims examples
• The losing or misplacing of confidential documents.
• Unintentionally sending an email to an unauthorised person, leading to a lawsuit for breach of confidentiality
• Using a copyrighted image or photo without having permission, rights to use or appropriate licence.
• Advising a client regarding their finances and taxes which results in the client becoming liable for costs with which they were not advised.
• Not performing a required audit.
Engineers and tradesmen
• Making an error in measurements that results in damage during or after construction and or additional costs to rebuild.
• Installing electrical equipment that is later found to be non-compliant with regulation, and in turn is required to be fixed/changed.
• A client claiming that their property was undersold after it is resold months later for 130% more of the previous price.
• Designing an office premises and the client suggesting that the layout was not in alignment with what had been agreed.
Marketing and Advertising professionals
• Designing a direct marketing campaign with brochures incorrectly addressed. The client claims damages for loss of potential revenue.
• Creating work using the wrong Branding/Pantone colour for a client’s logo, resulting in the client request for replacement work/collateral to be re-produced.
• A surveyor forecasts the construction costs for a number of cafes at the start of each project. The client claims that the monthly and year-end costings and forecasts were inadequate and incorrect, making the contracts non-viable.
• A person being injured after falling from builders’ scaffolding that a Safety consultant or Surveyor has permitted as fit for use.
• Providing incorrect advice regarding the planning permission on a plot of land.
• Failing to arrange travel insurance for a client who falls ill while on holiday in another country, claiming expenses and medical bills.
If I get Professional Indemnity Insurance, do I also need to have Public Liability insurance?
We often get asked this question. Everyone’s circumstances are different, so the key difference between the two is that Public Liability insurance mainly covers you for bodily injury and property damage, while Professional Indemnity mainly covers you for professional service and advice provided to clients.
Another key difference between the two is that Professional Indemnity Insurance covers you for allegations made, regardless of when the professional service was provided. By contrast, a Public Liability insurance policy would cover you when the alleged incident occurs during the policy period, even if the claim is filed after the policy has expired.