Do you require Professional Indemnity Insurance?

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:

• Designers
• Engineers
• Business Consultants
• Educators & Training Providers
• Coaches & Trainers
• Surveyors

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 marine@velosgroup.co.uk