Professional Indemnity Insurance

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Most Time people detect error in the insurance, but when you posses professional indemnity insurance, this will covers the cost of making up clients for losses or damage brought on by careless services or advice given by a company or a person.

Professional Indemnity Insurance



In Most cases, you may come up with question if  you need professional indemnity insurance.

If you work as a self-employed person or for an organization and provide your knowledge, expertise, or advice as part of your job, you might want to think about getting professional indemnity insurance.

However, it is obvious that Professional bodies or regulators for some professions mandate the purchase of professional indemnity insurance.

Which are as follow below;

See solicitors' professional indemnity insurance for further details. 

Accountants should visit the Financial Reporting Council website for more information.

Architects can visit the Architects Registration Board website for further information.

Chartered surveyors can learn more by visiting the website of the Royal Institution of Chartered Surveyors.

Some healthcare professionals can find further information on the Health and Safety Executive (HSE) website. Financial advisors can find more information on the Financial Reporting Council website.

Many other companies decide to get professional indemnity insurance to safeguard themselves from lawsuits, including:

  • Advertising agencies
  • Consultancies
  • Design agencies
  • Public relations agencies

What Is Cover

You are protected by professional indemnity insurance from lawsuits filed by clients or other parties alleging loss or harm as a result of negligent services or advice you gave.  

Even if you provide a service or advise for free, you could still face compensation claims. 

The Terms Of Your Insurance

Typically, professional indemnity insurance is provided based on the filing of claims. This means that only claims made against you while your policy is in effect will be covered by your insurer. Even if the occurrence occurred while your insurance was in effect, you will not be protected if a claim is made against you after it has expired.

For instance, if a customer files a claim against you in 2012, after your coverage has ended, for an incident that happened in 2011, when you had professional indemnity insurance, your insurer will not pay for that claim.  

You should think about getting a run-off policy if you decide to terminate your professional indemnity insurance, for instance if you are retiring or changing careers. This protects you from any fresh claims made against you following the expiration of your professional indemnity insurance. 

Your run-off insurance should protect you during this time since new claims may be made against you for up to six years following the alleged occurrence of a negligent act.

A run-off insurance will shield you from further claims for mishaps that happened while you were with your previous insurer if you are switching insurers. Alternately, your new insurer might agree to pay for claims stemming from earlier mishaps.

Check to see if your new insurer will pay for claims stemming from prior events, or inquire about purchasing a run-off policy. 

Purchasing professional Indemnity Insurance

By using the British Insurance Brokers' Association (BIBA), you can get professional indemnity insurance directly from an insurer or via a specialized broker. Your line of work will determine how much coverage you require and how much your premium will be.

Some regulatory agencies and professional organisations demand that its members have insurance coverage for a specific minimum. For instance, professional indemnity insurance must be in the range of £2 million and £3 million for any single claim brought against a solicitor.

Ask your clients how much insurance they anticipate you having if you are not a member of a professional organization.

Consult the ABI guide on insurance for small enterprises for more details on business insurance.

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