Not all risks in business can be easily seen or calculated. Errors can be expensive and cost your business a lot more than you would imagine.
Professional indemnity insurance, often shortened to PI insurance, is a type of business insurance that covers you for the costs that you might have to face if your work, service, or advice is proven to have been unintentionally negligent and as such, caused a client to suffer a proven financial loss. Even if you are found blameless and the claim is rejected, you could still be left with a large bill for expensive defence costs that could be crippling to your business.
The cover is offered on an annually renewable basis but can also be arranged for a specific project.
What’s typically covered?
Losses arising from the following events are usually covered under a PI policy:
- Unintentional Breach of Professional Duty
- Professional Negligence
- Errors and Omissions
- Poor Advice
- Libel and Slander (often referred to as “Defamation cover”)
- Infringement of Intellectual Property Rights
- Loss of Documents
- Unintentional Breach of Contract
What’s paid out?
Professional Indemnity Insurance would pay out the financial damages awarded by a court of law to the third party making a claim against you: as well as related legal defence costs up to the limit specified in the policy.
Who’s it designed for?
Broadly speaking, anyone who is in the “advice-giving” business should have professional indemnity insurance as a “must”. Examples of key professions for whom this insurance is vital include:
- Financial advisors
- IT professionals such as software and solutions developers
- Management and business consultants
Further professions that would benefit from professional indemnity insurance include (but are not limited to):
- Technical and engineers’ contractors
- Recruitment agencies recruitment consultants
- Designers such as web designers, graphic designers, and interior designers
- Fitness professionals including personal trainers, dance teachers and yoga instructors
- Teachers and tutors
- Copywriters and Content Writers
Even if you are not in the “advice-giving” business, other might insist you have the cover before they decide to trade with you. It sends a message that you are serious about giving a quality service to your customers and partners and that even if you have “a bad day at the office” you are protecting those you deal with at all times.
Typical Claim Examples
To help illustrate how Professional Indemnity can assist, here are some claim scenarios:
- An Architect who draws up property plans that later prove to be non-compliant with Building Regulations
- A Content Writer who supplies text to the commissioning company that infringes copyright publication laws
- A Financial Adviser who advises a client to invest money in a fund that is later proven to be financially unstable or volatile and causes significant financial loss to the investor
- An IT Consultant who recommended a software package to a customer which then turned out to be unfit for purpose after installation
Where can I get Professional Indemnity Insurance?
PI insurance is offered by a number of Insurance Companies here in the U.A.E. Insurance Market can assist you with finding the right cover for you at an affordable price. Contact us to give us the details necessary for us to secure you a quote.