Professional indemnity insurance

When should I get professional indemnity insurance?

The last thing you want is to start your business and fall at the first hurdle. So, it pays to have PI insurance in place as soon as you start working with clients. That way, you’re covered for any mistakes from day one.

It’s worth remembering too, that professional indemnity is 'claims made' insurance. That means for a claim to be covered, your policy has to be up and running both when a mistake is made, and when a claim comes in.

What’s the difference between professional indemnity and public liability insurance?

Professional indemnity and public liability insurance are similar in that they both cover claims of negligence against your business.

It’s the type of negligence where the differences lie.

Professional indemnity insurance protects you against claims made by clients unhappy with your work. This could be a failing to meet a contractual obligation, or not meeting the scope of work you agreed with your client.

On the other hand, public liability insurance covers your business against third-party claims for injuries or property damage said to be your fault. For example, someone tripping and falling at your premises, leading to a broken watch or an injured shoulder.

Read more about the differences between professional indemnity and public liability insurance.

Can I buy short-term professional indemnity insurance?

You can, but we don’t offer it ourselves, and for very good reason. It’s risky...

For a professional indemnity insurance claim to be valid, your policy needs to be active both when the work was done and when the claim’s made. And claims don’t always show up straight away, they can rear their ugly heads months or even years later.

So, if you cancel your cover the moment a contract ends, you could be left exposed. An annual policy gives you ongoing protection and peace of mind, even after the job’s finished.

Do I need professional indemnity insurance if I work from home?

The short answer is: yes.

Regardless of where you work, you’re still doing work for your clients, which can lead to mistakes and claims.

If you’re an accountant, you can just as easily make an error on a balance sheet whether you’re at home or in the office. It’s not where you are that matters, but the mistake itself.

It pays to know what insurance you need when you’re running your business from home. And professional indemnity insurance should definitely be top of your list.

Is professional indemnity insurance a legal requirement?

It depends on the industry you work in.

For example, if you’re a chartered accountant, chances are your professional body requires you to have a minimum amount of professional indemnity insurance when you become a member.

The same is true for other occupations administered by professional bodies, like surveyors and architects.

If you’re not sure, check your professional body’s website. They’ll have guidance on the minimum amount of cover you need. Some will also have lists of approved insurers, which you’ll have to get your insurance from if you want to meet their requirements.

Does professional indemnity insurance cover me for working with international clients?

Most UK insurers do cover overseas work, but there are a couple of key things to check before you jet off.

Your professional indemnity insurance will have two important limits:

• Geographical limits – where in the world you can work and still be covered.
• Jurisdiction limits – which country’s laws your contracts need to be written under.

If your work or contracts fall outside those limits, your policy won’t pay out if there’s a claim.

So, if you’re planning to work abroad or with international clients, make sure your PI insurance covers the locations and legal jurisdictions you’ll be operating within.

Still have questions? Here’s everything you need to know about working abroad with professional indemnity insurance.

How much does professional indemnity insurance cost?

How much your PI policy costs depends on what you do and how much of it you do.

Some professions are ‘riskier’ than others. For example, if an architect or engineer makes a mistake, the fallout can be very costly.

And by the laws of probability, the more clients you have, the more likely it is something will go wrong.

Whatever the cost though, professional indemnity insurance is a small price to pay for protection against claims that could seriously damage your finances and reputation.

To get an exact price, get a professional indemnity insurance quote. You’ll be able to select your occupation from among the hundreds we cover. It only takes a couple of minutes.