Many professional businesses run the risk of suffering a financial and professional disaster without the invaluable protection that Professional Indemnity (PI) insurance provides.
Traditionally, Accountants, Surveyors, Engineers, Solicitors and Architects, the mainstream professions, were regarded as 'professionals'.
Modern reliance upon services provided by others and the increased use by businesses of outside consultants has increased the scope of this term and a ‘professional’ is now often regarded as any person who offers 'specialist advice or service'.
This definition can include IT Consultants, Insurance Brokers, Graphic/Interior Designers, Marketing Consultants, Management Consultants and Business Consultants.
Most Professional Indemnity Insurance policies can provide you with the following covers:
· Breach of professional duty
· Defence costs
· Libel and slander
· Loss of documents
· Dishonesty of employees
· Fidelity
· Unintentional breach of confidence
· Infringement of copyright and intellectual property rights
· Previous firms or previous partners
If you are a professional who gives advice and/or a professional service you should consider PI insurance cover. In the absence of adequate insurance a large successful claim could cause you personal bankruptcy or the insolvency of your company. Even limited liability companies have balance sheets to protect and nobody wants to lose a business that they have worked hard to build.
One important aspect to bear in mind when considering professional indemnity insurance is that, because there can often be a long delay between an event and a subsequent claim, you need to be covered both at the time of the event and when the claim is made. It is the policy effective at the time of the claim which responds (known as a 'claims made' policy) but a PI policy must have been in place when the breach of professional duty was alleged to have taken place, although retrospective cover can easily be arranged.
It also means that if you plan to cancel your policy when you close your business or retire you may need to arrange "run off" cover for a period of time afterwards.
One way to minimise claims is to make sure projects are well documented. Ensure that you set out specific responsibilities in your contracts with clients beforehand and deal with complaints promptly. Client “sign off” at critical stages in a contract can be very useful and is evidence of good housekeeping within a business.
We can offer you advice and guidance on this specialist area of insurance and arrange the most suitable cover for you and your business. We have access to a wide range of PI insurers and quotations are available relatively quickly.
Please contact us for quotations or information.
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