What is professional indemnity insurance?
Professional indemnity insurance is sometimes referred to as PI insurance. It is a form of protection against compensation owed to a client. Compensation can vary depending on the type of claim as well as the severity. A professional indemnity policy will reduce the financial impact on your business by allowing you to recover losses from compensation claims made against you.
What does professional indemnity insurance cover?
Depending on policy coverage you may receive cover for causing a financial loss, or reputational damage, to a customer for:
- Professional Negligence – this may be due to a mistake on your part, or incorrect advice or information provided to a customer that results in them suffering a financial loss. It may also include your client overrunning on their budget and making a compensation claim against you.
- Legal Costs – including compensation payments awarded to the defendant. Your defence costs are also paid, including legal fees.
- Breach of Confidentiality – including sharing information without permission, or infringing any copyrighted material, trademarks, or intellectual property rights.
- Bodily Injury – if a client is injured due to your negligence.
- Property Damage – when a building or its contents are damaged due to negligent work.
- Acts of Defamation – such as libellous or slanderous statements made about a client.
- Loss or Damage to Goods or Information – loss or damage to stock, equipment, or other belongings, as well as information which could include documents or data..
If you own your own business cover may also extend to include your employees.
Professional indemnity insurance is provided on a claims made basis meaning it will only cover you for claims made during the time you’re insured.
Do I need professional indemnity insurance?
Not every business requires professional indemnity insurance, and it isn’t a legal requirement. Usually, this type of cover is required by businesses or individuals that offer knowledge, skills, or advice as part of their work. Some professionals will need to have professional indemnity insurance if they want to be a member of their professional body, or their industry may have regulations that require this cover. These professionals within the marine industry can include:
- Business Consultants
- Educators & Training Providers
- Coaches & Trainers
If you need more advice about the impact of Professional Indemnity on your business, call the experts at Velos.
Call us now on 0207 929 4058 or email us at firstname.lastname@example.org
What is Directors & Officers Liability Insurance?
Directors and officers (D&O) insurance policies provide liability cover for company managers to protect them from claims which may arise from the decisions and actions taken as part of their regular duties.
Any allegations of wrongdoing need to be investigated and defended, and this can come with a significant amount even if the case does not reach court. This means directors and officers personal finances are at risk, so it’s essential companies provide protection through directors and officers (D&O) liability insurance.
What is covered under Directors & Officers Liability insurance?
The main purpose of a D&O policy is to provide financial protection for managers against the consequences of actual or alleged “wrongful acts” when acting in the scope of their managerial duties. The D&O policy will pay for defence costs and financial losses. In addition, extensions to many D&O policies also cover costs for managers generated by administrative and criminal proceedings or during investigations by regulators or criminal prosecutors.
Who is covered under Directors & Officers Liability insurance?
All current, future, and past directors and officers of a company and its subsidiaries are covered under a D&O policy, which can also include non-executive directors. Cover is usually taken out and paid for by the company.
The Reassurance of Directors & Officers Liability insurance
Directors and officers insurance covers costs associated with the defence of an allegation of a wrongful act. This means it takes away the financial risks faced by directors and officers, giving them protection should an allegation or claim be made against them. Considering that even simple investigations can cost thousands purchasing directors and officers makes financial sense.
What is a wrongful act?
This could be a breach of trust, breach of duty, neglect, misleading statement, error, or wrongful trading, committed or attempted by a director or officer whilst acting in this capacity on behalf of the company.
Why are individuals vulnerable?
- Legal liability is shifting away from companies and towards personal liability.
- Regulators are now more proactive in investigating companies.
- Employees know their employment rights and are increasingly likely to pursue legal action..
If you need more advice about the impact of Directors & Officer’s Liability on your business, call the experts at Velos.
Call us now on 0207 929 4058
or email us at email@example.com