What Is Professional Indemnity Insurance?

Find out more about professional indemnity insurance in our useful video and how it can cover your business should a claim be brought against you.

 

Video transcript

Hi, my name is Ben Leech, and I'm an advisor for Towergate.

In this video I’m going to talk about Professional indemnity insurance.

This is a type of protection designed to protect you and your business should your customer suffer an injury, financial loss or damage to their reputation from some advice or service which you sold them.

So who needs professional indemnity insurance?

You should be seeking this cover if you 

  • Offer a service in return for payment. Such as consulting or contracting work.

  • Or give professional advice to clients. Such as a therapist or counsellor.

As you can see, this covers quite a lot of professions so if you are in any doubt as to whether you might need this, speak directly to a specialist insurance advisor or an industry organisation for confirmation.

It’s important to note that while professional indemnity insurance is not always a legal requirement, it is for many professions so make sure you are aware of your obligations.  Even for those who aren’t legally required it’s an important consideration when a compensation claim without adequate insurance could be crippling.

It’s also important to know that you don’t necessarily need to have made any professional mistake in order to need to make a claim either. If someone makes allegation against you and you need to defend yourself in court, this is another way in which professional indemnity insurance can keep you protected.

Certainly, in the same way businesses might never think about trading without public liability, for some professions, professional liability insurance is equally important for the type work they do and the specific set of risks they are open to.