Why do I need professional indemnity insurance (PI)?
Written by: YOURS INSURANCE AGENCY, September 13, 2019
Unlike public liability insurance (PL), which covers accidental physical damage or injury caused by you or your company, PI is focused on the financial side of things. So, if for some reason, one of your clients suffers financially as a result of your work, PI will step in, covering any legal and compensation costs that result.
Not sure it’s worth the investment? Here’s 10 reasons why you might want to think again…
1. You’re an advisor or consultant:
If you provide some kind of advice, for example as a lawyer, a designer or an IT or PR consultant, then your clients could potentially claim that they lost money as a result of your guidance. If that happens, PI will help you fight the charges.
2. You offer a professional service:
Same goes if you provide a service based on your skills or knowledge in something like software development, design, or advertising. In this case, professional indemnity insurance would protect you if a client claims your work isn’t up to scratch, or caused them to lose money.
3. Bad days:
However careful and dedicated you are, there are some days when the world conspires against you, resulting in mistakes or errors in your work. Luckily, PI was made for just those days, ensuring you don’t have to foot the bill for the fallout.
4. Data disasters:
Data can help you do incredible things, but it also comes with risks. If client data from your systems gets into the wrong hands, you’ve got all sorts of problems on your plate. If you’re ever facing a data disaster, professional indemnity will pick up any legal, compensation costs and penalties.
5. It could help you win business (or not lose it!):
Some clients will need to see that you have a certain level of PI cover in place, so getting protected will help ensure they don’t go elsewhere.
6. Relationships can turn sour:
Every new client is your favorite client, but relationships can deteriorate quickly, often through no fault of your own. If things turn nasty, professional indemnity insurance ensures you can challenge the allegations, and recoup any unpaid invoices.
7. Reputations are fragile:
Legal claims are stressful in more ways than one, not least because of the impact on your reputation — and that of your business. That’s why, with our indemnity cover, you’ll get PR support included, giving you the power to control the story.
8. Social media storms:
Twitter, Facebook and Instagram are great for connecting with your customers and promoting your brand, but they can also leave you exposed. One ill-judged post and you could face claims of defamation, breach of privacy or copyright infringement. So, if a social media storm hits, professional indemnity insurance will help you escape unscathed.
9. Protecting clients’ intellectual property(IP):
IP is everything in business, and your clients trust you to keep theirs under wraps. But if, for some reason, something leaks and you’re facing a legal battle, PI will come to your rescue. For more information on what to do if you face a trademark or copyright dispute, click here.
10. Your professional body or regulator might require it:
Professional indemnity isn’t a legal obligation, although some industry regulators and governing bodies do require it — for example, accountancy, law and architecture. So, it’s worth checking the situation in your sector.
Success in business comes from being bold, pushing the boundaries and sometimes making tough decisions. With a good professional indemnity policy, you have the confidence and peace of mind to keep doing your best work, without worrying about the consequences.