As a small business you face risks every day. Whether you already have professional indemnity insurance or you don’t have it yet, find out what can be covered and if you need it.
What is Professional Indemnity Insurance?
Professional indemnity insurance is designed to protect your business if a client should make a claim against you. This could be for inadequate advice, services or designs which they believe have negatively impacted or cost their business money.
Do I need professional indemnity insurance?
Did you know that without professional indemnity insurance in place you would be liable for any costs associated with a claim against your business? And these can run into the thousands. It’s important that you consider carefully whether your business could benefit from professional indemnity insurance.
If your business gives advice, produces designs or offers professional services to your clients then it is likely to be of value to you. This is because clients can claim compensation if there is a mistake in the advice, designs or calculations you provide them.
Likewise, if you handle data or IP for your clients you could face a potential claim if you were to mishandle or suffer a data breach so the cover may be worth considering.
Whilst we all work hard to ensure mistakes don’t happen, they unfortunately do from time to time so it makes sense to have cover in place to protect your small business if errors do occur.
Other factors to consider include:
• Whether you belong to a professional or regulatory body that requires you to hold indemnity insurance before you practice
• Whether your clients require you to have a policy in place and whether this could therefore help you win business
What does indemnity insurance typically cover?
Professional indemnity insurance will typically cover you if your business is sued by a client for a mistake that you have made
Professional indemnity insurance will typically cover:
– Your legal costs for defending a claim against your business
– Compensation costs that may be awarded to the client as a result of the claim
Whilst all polices vary in the exact cover they offer, they typically cover a range of risks which can include
– Professional negligence
– Breach of confidentiality
– Accidental loss of data or documents
– Incorrect use of copyrighted materials
– Defamation – something which you say or do write about a client which causes damage to their business or reputation
Some policies may require that you add optional extras to your basic policy to cover some of the risks above (or additional risks) whereas other policies may provide cover as standard. To ensure your policy includes the right cover for your business it is important to have a complete understanding of your business and the unique risks that you may face.
At Anthony Jones we work hard with our small business insurance customers to ensure they have the right level of cover in place so if you have any questions about whether you require Professional Indemnity Insurance and key risks to cover then do give us a call on 020 8290 9080 or email us at business@anthonyjones.com.
