Having failed miserably to convince you that directors' and officers' insurance is pointless, we're going to try again. This time with professional indemnity cover.
You might think you need it, but here's why you don't. (PS It's safe to take the box off your head now.)
5 good reasons you don't need professional indemnity cover
1. You don't make
Of course you don't. What kind of business crashes through contracts, mucking things up all the time? You're just the kind of conscientious professional that laughs in the face of negligence, right?
Having said that, you can be sued for, say, your subcontractors' mistakes.
Also, disgruntled clients can make life veerrry difficult if they think you've made a mistake, even when you haven't. Withholding payment, trashing reputations, you know the kind of thing. That happens a lot.
Yeah but it's not like professional indemnity insurance helps when you haven't actually done anything wrong, is it?
It does? What, with paid-for specialist legal people to fight your corner and everything? OK, fair enough, that does sound pretty useful.
OK, bad start. Let's move on.
2. You've got good terms and conditions
This makes sense. The best way to avoid problems is to state from the start who's responsible for what, and confirm what is and isn't going to happen. Looks professional too.
Sure, you can't really say 'you're not allowed to sue me' but, my goodness, your Ts & Cs can be very stiffly worded indeed. Make sure everyone knows there's no messing with you, eh? Watertight.
Except, if something does go wrong, your client won't care what the Ts & Cs say. If they're out of pocket and it's your fault, they'll want you to pay. And who can blame them? You'd do the same.
The fact is, all the terms and conditions in the world won't cover your legal bills, or compensate your client.
Unlike professional indemnity insurance. Or so we hear.
3. Your clients are nice and won't sue you
Good working relationships are built on trust and transparency. You like to keep things genial, too. And because you do, there's nothing you can't fix with a handshake and a smile.
It's doing business the old-fashioned way: with respect and good faith. It's worked for you before and it'll work for you again. Good on you.
There's a small problem with that, though, and it's called money. Respect and good faith go out the window when a client's asking why her project's gone £50k over budget. Or why her new website isn't generating the revenue you said it would. Or why she's got a big fine for filing a late tax return.
Hmm. Perhaps you should protect yourself with something more robust than a 'gentleman's agreement'.
Yeah, kind of makes sense now we think about it.
4. Your contracts are short
That's one of the best things about being self-employed. Get in, get out, get paid. Commerce moves quickly and so do you.
Realistically, you're never going to be around long enough to cause any real problems. And anyway, once you're done you're off the hook. Time to put your feet up.
That's right, isn't it? Your liability stops when your contract does?
Ah. No, it doesn't. In fact, mistakes can take weeks, months, even years to rear their ugly heads. Contract length is pretty much irrelevant. If your mistake has cost your client, they'll come after you regardless.
And, yes, we know professional indemnity insurance covers both past and present work. We were hoping you wouldn't spot that.
5. It's too expensive
Yes, it is. Way, way too expensive. Don't let that interest-free Direct Debit fool you.
Especially you, sole trader person. There are many, many more important things to spend a couple of hundred quid on. That new iPhone, for example. Or a caramel latte every other day (don't forget the croissant).
Besides which, if something does go wrong, you can call your family solicitor for help. They only charge £150 an hour or something. And you can always sell your car or re-mortgage your house to pay for your client's damages.
On second thoughts, maybe not.
Seems like you may need professional indemnity cover after all
OK, so we admit it. Put it down in black and white and professional indemnity insurance really isn't such a bad idea. In fact, it's a pretty good one.
Sure it's not sexy or exciting but that's not really the point. It's dependable, it keeps you safe and it protects your reputation.
So if, despite our best efforts you'd like a quote, just go here or call 0345 222 5391.
We won't try to change your mind. Promise.
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