Professional Indemnity Insurance in Cyprus in 2024. A complete guide on Professional Indemnity Cover in Cyprus.
Professional Indemnity Insurance in Cyprus
Professional indemnity, otherwise known as errors and omissions (E&O) insurance, protects businesses against professional mistakes regarding their company’s services.
Professional Indemnity Insurance Cyprus
Even experts make mistakes. In some cases, you might be falsely accused of making mistakes.
In any case, financial protection for legal defence costs can be a lifeline for your business.
Suppose a client sues your company for professional mistakes that allegedly harmed them. In that case, professional indemnity insurance can shield you from paying out-of-pocket costs for legal and potential compensation fees.
To answer your questions about professional indemnity insurance in Cyprus, we will highlight what professional indemnity cover can do for you and help you find the best professional indemnity insurance in Cyprus.
Table of contents
- What is professional indemnity insurance?
- What does professional indemnity insurance cover?
- Who needs professional indemnity insurance in Cyprus?
- Public liability and professional indemnity insurance
- Professional indemnity insurance cost
- Professional indemnity insurance quote
- Affordable professional indemnity insurance in Cyprus
- Best professional indemnity insurance in Cyprus
What is professional indemnity insurance?
Professional indemnity insurance protects businesses when employees make professional mistakes regarding the services they provide to customers or clients.
In the USA, this coverage is also known as errors and omissions insurance (E&O).
Even if you’re an experienced professional in your business, mistakes can happen.
If your customer or client believes that a mistake in your professional services caused them a financial loss, they can file a lawsuit against you or your company.
What does professional indemnity insurance cover?
Professional indemnity insurance protects against claims of:
- Negligence: If services you or your company provided result in damage or injury to a client.
- Misrepresentation: If a client claims that false or misleading information convinced them into a contract agreement with you or your company, which led to damages.
- Inaccurate advice: If a customer claims you provided advice that caused them damage.
- Libel: If someone accuses you or your business of libel or slander, whether true or not.
- Copyright infringement: If someone claims you or your business used copyrighted work without permission.
Professional indemnity insurance can help cover your defence costs if a client sues you for professional mistakes concerning your services. Defence costs include attorney fees and other court-related expenses.
Professional Indemnity Insurance Cyprus
Even if you didn’t do anything wrong and believe you’ve made no professional mistakes, your client can still sue your business.
Without coverage, you’ll have to pay expensive legal defence fees. Legal fees in Cyprus have increased by more than 250% in the last 5 years.
What professional indemnity insurance does not cover
- Bodily injury.
- Accidental death.
- Property damage.
- Cyber attack claims.
- Crime insurance claims (fraudulent impersonation, employees’ embezzlement).
- Directors & officers claims (mismanagement, abuse of authority, unfair practices, misrepresentation).
Bodily injury, property damage, and accidental death are covered by another contract called general public liability insurance. Cyber attack claims are covered by cyber insurance, while directors’ and officers’ claims are covered by directors and officers insurance.
Who needs professional indemnity insurance in Cyprus?
In Cyprus, professional indemnity insurance is only obligatory in specific professions that an association regulates.
For example, this insurance is obligatory for financial companies and fund administrators regulated by CySEC, lawyer members of the Cyprus Bar Association, and civil engineer members of ETEK.
Many technology companies must also acquire professional indemnity and general public liability insurance when signing a deal with an international company.
Nevertheless, all large international companies providing services to third parties in the EU, UK, and the USA are encouraged to have professional indemnity insurance due to the significant increase in lawsuits against professionals in the last decade.
Professional Indemnity Insurance Cyprus
In general, professional indemnity insurance is designed to cover professionals who give advice or provide services as part of their business.
Examples of professions that normally require professional indemnity cover are:
- IT consultants.
- Business consultants.
- Accountants.
- Architects.
- Surveyors.
- Engineers.
- Designers and construction workers.
- Interior designers.
- Coaches, trainers, and educators.
- Risk management.
- Town planners.
This is not an exhaustive list. Many professions require professional indemnity cover.
Professionals who might cause property damage, bodily injury, and accidental death through professional activities must also acquire general public liability insurance.
Public liability and professional indemnity insurance
When signing a deal with a large international company, companies in Cyprus are asked to sign a business contract requiring them to get insurance from a reputable provider.
In most cases, international companies require the acquisition of the following coverage.
- Professional indemnity insurance
- General public liability insurance
- Employers liability insurance
- Workers compensation insurance (in some cases).
For technology companies, there might be an additional requirement to acquire cyber insurance and multimedia insurance.
What’s the difference between general public liability and professional indemnity insurance?
Public liability is designed to protect against claims made by members of the public for injury or property damage.
Professional indemnity insurance covers claims by clients for professional mistakes or negligence.
In other words, public liability insurance covers claims related to non-professional accidents, while professional indemnity insurance covers claims related to professional errors and omissions.
Claim examples
Public liability insurance
Accidentally spilling coffee on a client’s laptop is not a professional mistake. This type of mistake or accident will be covered by public liability.
Professional indemnity insurance
A lawyer breaching confidentiality, and losing his client money in the process, is a professional mistake. His client can file a lawsuit against him - professional indemnity insurance will cover this type of mistake.
Professional indemnity insurance in Cyprus cost
The price of professional indemnity insurance depends on multiple factors. The most important factors are:
- The turnover of the company.
- The type of business activities.
- The required limit of liability and the requested deductible.
- The number of licensed professionals working in your company, their qualifications, and experience in similar positions.
- The territorial limits of coverage. By default, the territorial limits of your contract should cover where your clients are located. If you work with clients from the USA, Canada, and the UK, costs will be higher due to the high litigation costs.
- Jurisdiction and Choice of Law. Clients should specify the choice of law (which territory’s law they intend will be used to determine a dispute) and jurisdiction (in which territory they intend a dispute relating to the contract will be heard).
- Whether you use freelancers and oblige them to carry professional indemnity insurance.
- Whether you use standard contracts.
- Whether you are a B2C or B2B company. If you are a B2B provider, which is your largest contract?
Average professional indemnity insurance cost
For individuals, average professional indemnity insurance costs can vary from €500 to €5,000.
For companies, average professional indemnity insurance costs can vary from €500 to €25,000.
Affordable professional indemnity insurance in Cyprus
Pitsas Insurances is Cyprus’s most prominent provider of professional indemnity insurance contracts and the largest insurer of technology companies.
Our company cooperates with the largest international underwriters (from Munich RE, Zurich Insurance, Markel Insurance, and Swiss RE) and all local underwriters based in Cyprus.
Our excellent professional relationships and extensive contracts allow us to bargain the most profitable deals for our clients.
We can provide cheap professional indemnity insurance in Cyprus yet the highest quality products suited to every need.
We also provide generous discounts on predetermined premiums set by our underwriters.
Professional indemnity insurance FAQ
How much professional indemnity insurance do I need?
There’s not one solution to how much insurance you need, as every business is different and faces different risks.
When considering how much professional indemnity insurance you need, you should first consider how much coverage you need and what you can afford.
To do this, you can ask an experienced insurance agent to help you through the process.
Your insurance provider needs to ask you specific questions about your business and your needs to ensure you receive the correct coverage.
Your answers to those questions form the basis for your professional indemnity cover and allow the insurance company to determine what level of risk you pose to insure.
As mentioned earlier, the average cost of professional indemnity insurance is influenced by certain factors.
The common factors that help to determine how much professional indemnity insurance you need include the following.
- Your required level of liability.
- Your clients and territorial limits.
Level of liability
In general, your professional indemnity coverage must cover the estimated cost of correcting your professional mistakes and the legal cost of claims.
For example, if a client sues you and the total cost for compensation and legal costs amounts to €100,000. If you are only covered for €50,000, you must pay €50,000 out of pocket.
Clients and territorial limits
There is a large difference between the coverage you need for local businesses and large international companies.
Your professional indemnity policy needs to cover your client base and territorial limits to ensure you have enough coverage for the claim costs that may arise.
As mentioned previously in this article, there are other factors to consider when deciding how much coverage you need. An experienced insurance provider can help you determine your needs.
Do I need professional indemnity insurance in Cyprus?
As mentioned, professional indemnity insurance in Cyprus is only mandatory for specific professionals regulated by an association.
For example, this insurance is required for financial companies and fund administrators regulated by CySEC, civil engineers members of ETEK, and Cyprus Bar Association lawyer members.
As noted, technology companies are also commonly required to acquire professional indemnity and general public liability insurance when signing a deal with an international company.
Is there a chance my application will be rejected?
Our insurance agents examine and evaluate companies on a case-by-case basis.
We don’t discriminate against companies due to their size, their coverage requests, the scale of their operation, or the nationality of their directors.
It can be challenging to provide insurance coverage for companies with directors not involved in the company’s main activities, such as non-executive directors (e.g. lawyers and accountants).
We might also experience challenges if a company’s employees are freelancers not registered with the social security authorities of Cyprus.
In this case, we might require freelancers to acquire professional indemnity insurance from the country where they hold their tax residency.
I have established a start-up company in Cyprus. Can I get insurance?
We can provide coverage for new companies or newly established branches of foreign companies under certain conditions.
Suppose your company’s activities are grouped under a ‘traditional’ sector’ (e.g., real estate agents, lawyers, accountants, engineers). In that case, you will only be required to report the exact number of your workers and expected turnover.
However, suppose your company’s activities aren’t conventional. In that case, you will need to complete a questionnaire so we can assess your company.
In the case of branches of foreign companies, we will require information about the parent company and your relationship with them.
How can I reduce the cost of my professional indemnity insurance?
We are able to accurately cover your needs when you provide thorough and correct information to us. This also helps us to tailor your plan to your budget constraints.
We can then provide customised coverage for you instead of a generalised and more expensive cover with additional coverages you don’t need.
In some instances, we might also be able to include a sizable excess amount.
Why are you cheaper than competitors?
We have built a vast network of partners across the globe with 40 years of experience in the Cyprus insurance industry.
Depending on your business activities, we directly forward your application without intermediaries to at least three large international reinsurance companies.
We partner with reinsurance companies in the USA, the UK, and the Netherlands.
What are the most common activities of your current clients?
Currently, our biggest clients are English, German, Russian, Swedish, Cypriot, Ukrainian and Belarussian companies.
These clients are involved with the following.
- Technology (Artificial Intelligence, IT, mobile apps, CRM, web development).
- Multimedia companies.
- Telecommunication companies.
- Maritime (shipping).
- Real estate services.
- Economics (finance, holding companies).
- Currency exchange (Forex, binaries, cryptocurrencies).
- Advertising and marketing, legal services (trust, alternative funds).
Professional indemnity insurance quote
Pitsas Insurances has been operating since 1985, making our company one of the longest-standing insurance companies in Cyprus.
We are proud to have more local and international awards for our quality of services than any other insurance company in Cyprus.
Professional indemnity insurance compare
Pitsas Insurance is the largest provider of professional indemnity insurance contracts in Cyprus.
The scale of our company is attributed to the fact that we cooperate with the largest international underwriters and with all of the few local underwriters based in this country.
Among the international underwriters we cooperate with are Swiss RE, Munich RE, Zurich Insurance, and Markel Insurance.
To find out more about our professional indemnity insurance, see our website.
Professional indemnity insurance online quote
Complete our questionnaire here to receive a personalised online quotation comparing the offers of the largest providers.
One of our insurance consultants will contact you within 24 hours to discuss your company’s needs and advise you of the best plan.
Professionals requiring professional indemnity insurance in Cyprus
When signing a deal with a large international company, IT consultants are required to acquire professional indemnity insurance.
Professional indemnity insurance for IT consultants in Cyprus
Regardless of their turnover, Pitsas Insurances provide professional indemnity solutions for IT consultants.
The benefits of Pitsas Insurances
- We provide affordable contracts for small IT businesses or consultants (one-man companies).
- We have dedicated contracts providing additional cyber insurance for those given access to their customers’ systems.
- We provide contracts with international jurisdictions and territorial limits. We provide coverage for IT consultants cooperating with customers in the USA and UK.
Professional indemnity insurance for doctors in Cyprus
Doctors in Cyprus registered in GESY should acquire professional indemnity insurance.
See our article above for more information regarding professional indemnity insurance for doctors in Cyprus.
Professional indemnity insurance for accountants
Accountants in Cyprus are not required to acquire a professional indemnity insurance contract.
At Pitsas Insurances, we provide various options for accountants and beneficial incentives for acquiring professional indemnity insurance as protection against possible lawsuits.
Professional indemnity insurance for consultants in Cyprus
It is usually extremely difficult for general consultants in Cyprus to acquire professional indemnity insurance with a reasonable premium.
However, Pitsas Insurances have dedicated application forms for general consultancy firms.
We can bargain better terms for general consultants via our extensive contracts by understanding the nature of their work with the information we collect from them.
Professional indemnity insurance engineers in Cyprus
Engineers in Cyprus must acquire professional indemnity insurance to become members of the ETEK (Cyprus Scientific and Technical Chamber).
Professional indemnity insurance architects in Cyprus
Architects in Cyprus are not obliged to acquire professional indemnity insurance.
Nevertheless, large construction companies require architects to possess professional indemnity insurance if they will work with the company on specific projects.
Professional indemnity insurance lawyers in Cyprus
Lawyer members of the Cyprus Bar Association must have professional indemnity insurance.
We strongly recommend lawyers acquire professional indemnity insurance based on their turnover and not according to the minimum requirements set by the Cypriot Law.
Best professional indemnity insurance in Cyprus
The best insurance contract largely depends on what you require from your insurance. We can help you find the best professional indemnity insurance in Cyprus according to your needs.
Our experienced insurance consultants analyse your needs and budget constraints and work to find the best option for your business.
To get you the best insurance, we use your information to understand the minimum number of terms ideal for your contract.
We then aim to understand the requirements set by your clients, suppliers, partners, and regulators.
From there, we try to find the most affordable contract for you, after which we suggest optional terms to increase your protection.
Professional Indemnity Insurance Cyprus
We boast fewer exceptions in our contracts than any similar contract in Cyprus.
As we cooperate with more international underwriters than any other Cyprus insurance company, Pitsas Insurances is equipped to find you the best insurance deals.
Pitsas Insurances Team