When it comes to your business insurance, a key term you may come across is “professional indemnity (PI)”. But what is it and why is it important to have?

PI insurance covers you if a client or customer makes a claim

Put simply, PI insurance covers you if a client makes a claim against you for financial loss because of your advice or services. Although it is not a legal requirement, you may find that potential clients may not work with you if you don’t have it. It also covers you for expensive legal claims if you are accused of negligence by a client or customer. PI insurance can also help cover costs associated with investigating the nature of the claim and public relations in the event of a claim.

It covers a wide range of scenarios including incorrect advice, loss of customer data, and more – and it also offers business continuity after financial damage has occurred, so you can keep your business going. It can even cover you for work that has happened before you took out your policy (to an agreed date with your insurer).

Consider what could happen if a client brings a case against you for a mistake you made - you could be out of pocket for a lot of money in legal fees fighting the allegations. With PI insurance, you will be covered for legal fees, so you won’t take as much of a financial hit. As it can help to cover costs associated with investigating the nature of the claim, it could alleviate any potential reputational damage by finding out the truth behind what has happened.

PI insurance safeguards your business’ reputation

Having PI insurance safeguards your business’ reputation while also demonstrating professionalism, and it offers reassurance to your clients that you have done your due diligence. This can be useful for attracting new clientele or customers, where this may be a deciding factor when comparing multiple businesses.

PI insurance is necessary for certain professions

For some professions, it is mandatory, with the requirements and limits set by a central regulating body. If you wish to join a professional body, you may need to have a certain level of insurance.

How Towergate Insurance can help

Mistakes can happen at any time, no matter how much care you take with your work, so having PI insurance in place can offer peace of mind that you won’t be left out of pocket if a mistake does happen. To find out whether you need it, have a chat with your insurance broker to find out more about it.

At Towergate Insurance, we can help you get this right from the outset and will stand by your side if a client brings a case against you. Just speak to your dedicated advisor to find out more.   

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems, we recommend that professional advice be sought.