Professional Indemnity Insurance FAQ
Though the term was previously reserved for more mainstream professions, a 'professional' is now regarded as any person who offers specialist advice or services to another. As the definition has expanded, so has the possibility for making mistakes during work and consequently causing financial loss.This is where Professional Indemnity Insurance comes in to protect you.
1.What is Professional Indemnity (PI) insurance?
Professional Indemnity Insurance is a policy designed to protect business owners, freelancers and the self-employed in case a client claims their services were subpar and decides to sue. PI insurance is designed to safeguard service-based enterprises no matter what.
2.What does Professional Indemnity insurance cover?
This policy usually covers your legal liability to pay damages, plus any expenses or defense costs that may arise out of a negligent act of omission, fraudulent acts of employees, libel, or an unintentional breach of confidentiality. Trickier areas such as defamation and the use of intellectual property are also covered by Professional Indemnity insurance.
3.When does my coverage start?
Professional Indemnity insurance usually only covers events that have occured since you have held the policy. This is called a retroactive date, namely the date from which you have held uninterrupted professional indemnity insurance cover, or a date in the past from which your insurer has agreed to cover you. Any claims that arise from events happening prior to this date are not covered.
4.What is the difference between Professional Liability and Public Liability Insurance?
They are both types of business insurance but the nature of their claims is different. Public Liability is more tailored for claims by members of the public for damages, illness or injury, whereas Professional Indemnity insurance covers claims happening because of perceived professional errors or negligence.
5.Is Professional Liability insurance a legal requirement?
No. The only form of business insurance businesses are legally required to have is employers’ liability.
For any further information regarding insurance policies for your business, contact us at 26 600 620 or by email at [email protected].