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What is professional Indemnity Insurance and do I need it?

What is professional Indemnity Insurance and do I need it?

What is Professional Indemnity Insurance?

Professional indemnity insurance offers protection for businesses and individuals who provide a professional service. Professional Indemnity Cover should be taken out by practitioners such as surveyors, solicitors and accountants who are providing advice. It is also appropriate for anyone who handles client data and those who are responsible for intellectual property. Membership of a professional organisation such as the RICS (Royal Institute of Chartered Surveyors) is likely to require professional indemnity insurance as a condition of membership. Professional Indemnity Insurance is sometimes also referred to as E & O Insurance (errors and omissions), professional liability insurance or just indemnity insurance

Why do I need Professional Indemnity Insurance?

When you operate in a professional capacity, whether you are providing advice or professional services, you need protection from claims against you as an individual or your business. This insurance will protect you in the event of a claim made against you for alleged negligence, inadequate or poor advice, or an act or omission by you which has caused your client to suffer loss or damage. Indemnity insurance may also provide you with cover against claims arising from a breach or loss of data/documents, unintentional breach of copyright or confidentiality and claims arising from alleged defamation or libel. No matter how experienced you are in your field, it is always possible to make a mistake and face legal proceedings. Indemnity insurance provides you with the peace of mind that you will be able to defend yourself against these actions and cover any damages required should you be found liable.

Is Professional Indemnity a legal requirement?

You are not legally obliged to have indemnity insurance in place (for more on legally required insurance see our blog ‘What Liability Insurance is Necessary for Businesses?’). However, it may be a requirement of taking on certain jobs, especially if they involve the public sector. Membership of many trade and professional bodies may also require you have this cover in place.

What does Professional Liability Insurance cover?

  • Alleged negligence or actual negligence
  • The cost of defending yourself against action
  • Defending allegations of Libel or Slander
  • Temporary staff and independent contractors
  • Claims arising from services provided in the past
  • Claims and damages for client’s losses

Professional Indemnity Insurance can be taken out as a stand-alone policy or as part of a bespoke business package insurance which could also take care of public and employers liability cover, premises cover etc. Here at GM Insurance, we understand that all businesses are unique and may have specific requirements for business insurance so we will always take the time to get to know your business and recommend a package to suit your needs. For more information on our range of business insurances, or to speak to one of our experienced staff, get in touch.

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