Professional indemnity insurance, or PI insurance, is designed to protect your businesses if a client loses money because of a mistake you made in your professional services.
Professional services include design work, advice or consultations carried out for your clients. If a claim is made against you, a PI policy would cover your legal defence fees and the compensation costs if their claim was successful.
PI insurance covers the legal and compensation costs if a third party sues you because they suffered a financial loss as a result of the professional services you provided. The types of risks covered could include:
Breach of contract
Intellectual property and trademark disputes
Defamation and libel
Professional indemnity insurance is suitable for any person or business that offers professional services, which includes design work, consultancy and advisory services. PI insurance is especially popular with freelancers and contractors who offer these.
If you don’t have PI insurance, you may also lose out on some clients, as it can be a requirement before entering a contract.
Professional indemnity only covers liabilities relating to your professional negligence, so if you need protection against accidents with the public or claims made from your employees, it’s best to combine several types of business insurance to make sure you’re covered for these things.
The cost of professional indemnity insurance varies depending on factors such as your turnover; industry; number of employees and your business’ location.
Professional indemnity cover can cost as little as £7.58 a month. However, people working in areas where there is a higher risk, or more expensive claims are possible, will pay more.
A financial adviser, for example, can expect to pay about £40, a commercial builder a few hundred and an architect possibly more than £1,000.
You can see how much your professional indemnity insurance will cost by starting an online quote – it takes less than 10 minutes.
When comparing professional indemnity insurance quotes, there are some things you can look out for to make sure you’re getting a good policy. These include:
The level of cover – does the policy cover everything you need it to?
The price and additional charges – how affordable is the policy? And does the company charge extra for things like add-ons, adjustments or cancellations?
The length and flexibility of your policy – how long will you be tied in for? And can you change your policy once you’ve started?
The claim process – how easy is it to make a claim? And how long will the process take?
Determining these factors will help you decide on a policy that matches what you need.
If something isn’t right and you think you need to make a claim, it would be best to contact your insurance provider.
They will be able to tell you if the claim is valid and how best to proceed. At Superscript, you’ll find claims details in the documents available in your personal portal that you gain access to once you start a policy.
There are many different types of business insurance, and some will be more relevant to your business or services than others. The most essential types of business insurance alongside professional indemnity are:
Public liability insurance – covers you for accidental property damage or injury to a third-party.
Employers’ liability insurance – a legal requirement for those with employees and covers you for claims made against you by your employees.
Business contents insurance – covers your office contents and equipment such as computers and laptops, documents and even cash from theft or damage.
Directors’ and officers’ insurance – if you're a company director or officer, this covers claims made personally against you.
Cyber insurance – covers your business from risks that occur when storing or handling data, such as hacking, malware and cybercrime.
These are just some of the most common types of insurance. Depending on what industry you’re in or the type of work you do, you may need other types of insurance, so it’s best to speak to an adviser.
Yes, once you have confirmed your policy, your insurer will send out your permanent policy documents, including a certificate of insurance. This can be used as proof of the insurance you have.
If the work you do is contracted or involves consultancy, giving advice or design, it’s strongly recommended that you take out professional indemnity insurance.
While not a legal requirement, many clients ask for it as part of the contract and means that you will be protected if something did go wrong.
This depends on who you have a policy with. With some providers you can claim as many times as you need within the policy period and up until the aggregate limit.
Check your policy wording to find out what applies to you.
You may have to pay an excess if you make a claim, but this depends on the insurer and the claim.
Check your policy documents to find out what applies for you.