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Professional Indemnity Insurance explained

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Sometimes. the figures don't add up. If you get your figures wrong, your client could find themselves in financial difficulty. This is where you become liable for a claim.
Professional indemnity insurance for Energy Consultants. PI insurance cover.

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.

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R K Henshall & Co Ltd, The Grove, Mill Lane, Wheelock, Sandbach, Cheshire CW11 4RD.

Copyright © Hensure | Hensure Business Insurance Consultants is a trading name of RK Henshall & Co Ltd. www.rkhenshall.com. RK Henshall & Co Ltd are authorised and regulated by the Financial Conduct Authority. Registration Number: 0308865. Directors: J.R. Henshall B.A.(Hons) ACII Cert CII (FS), A.J.Simpson ACII, A.Brown FCCA. Company Secretary: A.Brown FCCA. www.fca.org.uk. Written quotations, policy terms, conditions and exclusions are available on request. Privacy policy, Cookie policy, Terms, Complaints Procedure, Consumer Duty Statement

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