What is professional indemnity insurance?

Professional indemnity insurance protects you against claims made by dissatisfied clients.

If you find yourself in dispute with a client, your professional indemnity policy will cover the cost of defending any allegations or claims made against you, so you won't have to pay lawyers' fees.

If you're in the wrong, the insurer will either pay the cost of putting your mistake right, or pay compensation on your behalf.

Why do I need professional indemnity insurance?

As a professional, you owe a legal 'duty of care' to your clients.

If you breach that duty of care by making a mistake in the services you provide, your client can claim compensation from you for losses and expenses caused by your negligence.

In today's commercial environment, both individual clients and corporations seek compensation more frequently than ever before. Even if an allegation made against you is false, you'll still have to defend yourself.

Without insurance you'll have to find and brief your own lawyer - who may or may not be an expert in litigation.

Then, as well as paying the deposit most lawyers require upfront, you'll also have to cover the subsequent legal costs yourself and any compensation.

While in reality most claims are settled before they get to court, the legal costs involved, in even quite minor disputes, can build up very rapidly.

With professional indemnity cover, your insurer will defend claims on your behalf, and meet any damages you may have to pay.

In fact, with the right professional indemnity policy, the only cost you'll have to pay is the excess on the policy, no matter how high the lawyer's fees.

Who needs professional indemnity insurance?

Quite simply, anyone who gives advice or provides a professional service to clients.