Need Professional Indemnity Insurance explained? There are a number of things to be taken into account when choosing Professional Indemnity Insurance. We have included some below.
What is Professional Indemnity insurance?
Professional Indemnity insurance is a policy that will provide cover for legal expenses that you may face whilst defending an insurance claim, as well as any compensation that you are required to pay to your client.
Do I need Professional Indemnity insurance?
Some professions are required to hold a PI insurance policy by their regulatory body. Others may be required as part of a contract to hold a policy with a certain limit of cover.
Mistakes can happen, even for individuals with many years of experience. Even if you are not required to have PI insurance, you should assess the risks to your business and the potential financial repercussions, should a claim be made against you.
Limit of indemnity
The Limit of Indemnity is the maximum amount of money that a professional indemnity policy will pay out.
When looking for Professional Indemnity Insurance cover it is necessary to choose the limit of indemnity that you consider will be necessary to cover the risks faced by your business. It may also be the case that you are obliged to buy a certain level of professional indemnity insurance cover as instructed by your relevant professional body, or to satisfy the criteria set out by the principal contractor under a contract before you can deal with them.
Claims Made Basis
It is important to understand that PI policies are written on a claims made basis. This means that they provide cover for claims made against you during the policy period (i.e. after the inception or renewal date) that relate to work that you have done at any time after the retroactive date.
Policies on a claims made basis should include a retroactive date to protect the policyholder against claims in respect of work undertaken prior to the current policy year. The retroactive date should coincide with the date you started trading or the effective date of your first professional indemnity policy. It is possible to arrange a policy with a retroactive date of none, which effectively provides cover in respect of all previous periods.
Fill out a quick form and you're on your way to getting effective business insurance.
Get a quote onlineWe're happy to talk to you to answer any query you may have.
Our opening hours are Mon-Fri 9am - 5pm.
Request a call back