If your business offers advice, professional services or handles client data and intellectual property then Professional Indemnity Insurance is one of the most important branches of business insurance that you require.
Professional indemnity insurance makes sure you are covered in the case a client claims compensation for any mistake in the advice you have given them; any mistakes in designs, plans or calculations; any accidental disclosure of important data or infringements on a client’s legal rights. Some clients will only work with certain businesses that have professional indemnity insurance and it is compulsory by some professional bodies and industry associations.
What Is Covered Under Professional Indemnity Insurance?
Your business’ compensation payments and legal fees will be covered in the event of a client making a claim against you. Any monetary loss your client suffers will be covered through the compensation payment.
Mistakes can occur in a number of different areas; from measurements to strategic advice, anything that can cause a client to lose money and that can be deemed responsible to yourself can land you in an expensive lawsuit. Clients can make claims of:
- Negligence – Should one of your employees lose or misplace any important documents that enclose secure information, they can put the client in danger of losing money.
- Infringement of Intellectual property rights – Not having the appropriate rights and licensing for copyrighted images and phots can allow the copyright holder to sue for damages.
- Breach Of Confidence – The sharing of confidential information and commercially sensitive information without prior consent from the owner.
As well as:
- Libel, Slander or Defamation
- Employee Dishonesty
- Accidental transmission of a computer virus
What Happens Without Professional Indemnity Insurance?
If a third party should make a claim against you and you don’t have professional indemnity insurance you may end up having to pay large amounts in damages as well as face the reputational repercussions, all of which can not just put your business in trouble but could cost you your business altogether.
Claims can reach hundreds of thousands, if not millions, which is why it is vital that you have a policy that will cover these costs to save your company should a mistake be made.
How Much Professional Indemnity Insurance Do You Need?
Cover levels can range from between £50,000 and upward of £2 million. The average cover provided by insurers to businesses and professionals is £50,000 as standard. Cover itself can be bought as a standalone cover or can be included as part of a business insurance policy encompassing other areas.
Each business’ price for indemnity insurance will be determined by the type of work that they do, whether or not they have made a claim before, as well as the level of cover that is chosen. The easiest way to find the right deal for your business is to compare professional indemnity insurance with us at Quote Goat. We compare insurance companies for you, so you know that you are getting the best possible policy at the best price for you.