How much professional indemnity insurance do I need?
Professional indemnity insurance is often sold in varying limits. To decide how much professional indemnity insurance you need, you should consider:
- The size of your business
- The size of the clients you are dealing with
- How much it might cost to defend yourself in court
- Is your industry regulated?
The amount of cover required will depend on the amount of exposure that your client has.
If you’re in an industry which requires you to have professional liability due to regulations, it’s likely that there is a recommended amount of cover associated with your profession. You can check this with your regulator to ensure you’re covering the amount required of you.
Do I need both professional indemnity and public liability insurance if I am starting my own practice?
Starting your own practice can be an exciting time, but it can also be daunting going out on your own, particularly with all the set up costs involved. When it comes to insurance, you need to consider whether you can afford not to have it in place. Faith Chapman from Towergate Insurance explains why professional indemnity and public liability insurance is important:
Professional indemnity cover will protect against any claims made against you should you be accused of Professional Negligence, this can include things such as incorrect advice or recommendation, breach of professional code of conduct, loss of documents or breach of confidentiality. A client could allege that as a result of a recommendation you made in a session, they have suffered an adverse effect and as a result they have been harmed. This type of policy will cover the costs to defend you against this allegation, and ultimately if the client is successful in suing you, will pay out the damages awarded.
Public liability cover will protect you in the event of any claims made in respect of accidental injury or damage to a client or a member of the public, and it also covers loss or damage to public property. If for example you accidentally spilt coffee on a client’s laptop this would be covered or if a client were to trip over whilst visiting you, this policy would cover the legal costs to defend you, and again pay out if the client was successful in suing you.