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Professional Indemnity Insurance – taking the risk out of business

If you are in the business of selling your knowledge or skills, you may want to consider taking our Professional Indemnity Insurance (also known as PI insurance). PI insurance protects your business against claims for loss or damage made by a client or third party if you make mistakes or are found to have been negligent in some or all of the services you provide. PI insurance will also cover legal costs.

In today's litigious world, PI insurance is an absolute must. Traditional professions such as architects, business consultants, engineers, insurance brokers, solicitors, independent financial advisors, accountants, computer consultants all carry PI insurance as it is compulsory to do so. Many other business sectors choose to carry PI insurance – such as PR agencies, designers and consultants. The insurance covers such areas as libel and slander, professional neglect, malicious falsehood, passing off copyright, breach of confidentiality and negligent statements or actions.

One important aspect to bear in mind when considering PI insurance is that cover is usually on a claims-made basis. This means that the policy will only cover claims that are made while the policy is 'live', but any such claim could date back many years yet it would be covered by the current year's policy. You are free to change insurer providers and any new insurer will need to understand your business processes, complaints history and, of course, previous claims history – after all, they could be picking up a very expensive claim that pre-dates their relationship with you.

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, as you would not be able to go back to a previous insurer (who might have covered you at the time when an incident leading to the claim actually took place) and you certainly wouldn't want to have to cover the cost of a claim from your own precious retirement fund!

One way to minimise such 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.

As this is a specialist area of insurance, make sure you obtain professional advice. Talk with Westhill Insurance Services – their knowledgeable and friendly team will guide you through the insurance maze and make sure you have the correct level of Professional Indemnity Insurance you need to keep your business protected.

With life being so busy, mistakes can easily be made. PI Insurance will ensure that you are protected from ramifications previous errors may have caused. It's not worth the risk to be without, so call Westhill Insurance Services and let them find the best policy for you. As independent brokers, they will search to find the best insurance cover for you – so you can get on with running your business, not worrying about it!

If you'd like to read our product information regarding Business Insurance please click here.

Contact Westhill Insurance Services, today.

Posted on 16th July, 2011