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Professional Indemnity Insurance

Professional Indemnity (PI) Insurance protects your business against claims for loss or damage by a client or a third party if you have made mistakes or are found to have been negligent in some or all of the services that you provide for them. PI insurance will also cover legal costs.

Many professions traditionally have been required to have PI insurance cover as a regulatory requirement or as a result of their professional authorisation. This includes solicitors, accountants, architects, engineers, mortgage intermediaries, insurance brokers, and financial advisers.

However a modern reliance upon services provided by others and the increased use by businesses of outside consultants has increased the scope to include any person who offers specialist advice or services including management and business consultants, IT consultants, graphic and interior designers and marketing businesses.

Most Professional Indemnity Insurance policies can provide you with the following covers:

  • Breach of professional duty
  • Defence costs
  • Libel and slander
  • Loss of documents
  • Dishonesty of employees
  • Unintentional breach of confidence
  • Infringement of copyright and intellectual property rights

One way to minimise claims is to make sure projects are well documented. Ensure that you set out specific responsibilities in your contracts with clients beforehand and deal with complaints promptly. Client "sign off" at critical stages in a contract can be very useful and is evidence of good housekeeping within a business.

One important aspect to bear in mind when considering PI insurance is that cover is usually on a claims-made basis. This means that the policy will only respond to claims that are made while the policy is "live".  So if you plan to cancel your policy when you close your business or retire, you may need to arrange "run-off" cover for a period of time afterwards.

For further information, please contact a member of our Insurance Team to the right of this page.

Mitchell Charlesworth Insurance Solutions Ltd is registered in England and Wales no. 7002662 and is authorised and regulated by the Financial Conduct Authority.