Professional Indemnity Insurance
Professional indemnity insurance is a type of cover intended to protect you against any claims made against you due to your work.
Professional indemnity insurance is a form of insurance cover, specifically designed to cover any indemnity brought against you for your work.
Professional indemnity insurance can cover you and your business for a number of different eventualities, and can reduce the impact that a costly mistake might have on your life.
How can Professional Indemnity Insurance protect you?
Generally, professional indemnity insurance will work to protect you when you make some kind of professional mistake, or are responsible for another kind of oversight.
There are a number of different accidents, mistakes and mishaps that you could find yourself facing an indemnity for. Without a professional indemnity insurance policy in place, you could find yourself completely exposed when any of these happen:
- negligent act
- intellectual property infringement
- loss of data
- loss of documents
- breach of confidentiality
- employee dishonesty.
Fortunately, a professional indemnity insurance policy can cover you in any of these situations. Professional indemnity insurance will also support you by covering any legal costs incurred in court, or when employing solicitors to battle an indemnity claim made against you.
Professional indemnity insurance can be useful to people in all kinds of careers. While some professionals, such as doctors, nurses, vets and hypnotherapists, obviously benefit from having this insurance in place (and in some cases are required to), people in jobs as diverse as wedding planner, plumber, security guard or hairdresser may also find it worthwhile. Whether you're a beautician or a builder, professional indemnity insurance could save your livelihood if something should go wrong.
Limitations of Professional Indemnity Insurance
Professional indemnity insurance is a vital tool and it can be a lifesaver – however, it is not able to cover everything. For example, if someone sustains an injury where you work that isn’t a direct result of your work, professional indemnity insurance will be unable to cover it.
If you are an IT contractor, and you make a programming or coding error that loses the company £2million, a professional indemnity insurance policy will cover you. However, if an employee walks past and trips over the power cable to your laptop and breaks their knee, professional indemnity insurance will be of no help. This is where public liability insurance cover is needed.
Similarly, if an employee of yours is injured at work and decides to sue you, professional indemnity insurance will not be able to cover you. Employee liability insurance is needed in this situation, and is a legal requirement for any employer.
What insurance cover will you need?
The nature of your professional indemnity insurance will depend on a number of different factors.
The tasks involved in your job will be a main contributing factor. For example, a doctor may find that their professional indemnity insurance is more expensive than that of someone who works in catering, due to the increased risk of causing serious personal harm and death.
Your insurance will also depend on how much you expect to earn, and how much an indemnity could potentially cost you.
Naturally, an accountant who is a high earner dealing with major accounts for a major company has the potential to be hit with a higher indemnity than a smaller-time accountant.
Indemnity payments have been known to run into the millions in some cases, and it is important that you consider fully exactly how much an indemnity payment could cost you.
The maximum payment for a professional indemnity insurance policy will generally be upwards of £100,000. However, some organisations may insist that you have cover in excess of this before they employ your services.
Other additions to a Professional Indemnity Insurance policy
There are other considerations worth taking when seeking out the right professional indemnity insurance policy for your purposes.
It is possible to have a professionally indemnity insurance policy that will cover you for work done in the past – if you completed work years ago and have only just been sued for it, your policy could retroactively cover any indemnity that you are liable for.
You can also get professional indemnity insurance that will cover you beyond the end of your career – if you retire or change career to something completely different, your insurance policy could continue to cover you if you are sued later in life.
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