What does professional indemnity insurance cover? | Simply Business UK

Professional indemnity insurance can cover a wide range of potential risks. what may seem like small mistakes can be very costly, but professional indemnity insurance can help protect your business.

Professional indemnity insurance can cover you for mistakes, including professional negligence, unintentional breaches of confidentiality or copyright, and loss of documents or data.

Reading: What does professional liability insurance cover

For example, you’re transmitting sensitive customer data, but you accidentally copy it to the wrong person in the email. or you are an architect who is designing a house but you make a mistake on the plans and the house then collapses. in both cases, you could be sued by your client. the compensation payment will generally take into account the financial loss the customer has suffered due to your mistake.

Keep in mind, however, that professional liability insurance does not cover you for the cost of any reputational damage caused by errors.

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Does professional indemnity insurance cover bodily injury?

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Professional indemnity insurance may cover third party compensation for bodily injury, but only if the injury is caused by your negligence in the performance of your professional duties. Professional indemnity insurance covers financial loss, personal injury, and property damage resulting from your negligent act, error, or omission while working for a client.

However, if someone slipped into your office, for example, it would be liability insurance that you would need to cover an injury compensation claim. And it’s employer’s liability insurance that he needs to cover employee claims for workplace injuries.

Does professional indemnity insurance cover consequential losses?

In the context of professional indemnity insurance, consequential loss is a financial loss suffered by your client that is indirectly due to your professional error or negligence.

Consequential loss is sometimes covered by professional indemnity insurance, though you should check your policy documents to make sure. Even if your professional indemnity insurance covers consequential losses, there will usually be some exclusions. for example, consequential loss from a computer virus will normally be excluded.

does professional indemnity insurance cover contractors?

You must tell your insurer that you have employees (even if they are contractors) so they can be listed on your insurance policy. Your professional indemnity insurance may cover mistakes made by your employees that result in a claim for compensation from your client, and this can potentially include mistakes made by your contractors.

Remember, it’s employers’ liability insurance you need to cover compensation claims made by your employees for illnesses or injuries caused by their work. this insurance is a legal requirement for most businesses with employees, and this includes some types of contractors.

Does professional indemnity insurance cover defamation?

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Defamation is something spoken or written that damages someone’s reputation and is proven to be false. professional indemnity insurance usually covers unintentional defamation, but check your policy documents to make sure.

Does professional liability insurance cover budget overruns?

If your client claims that you failed in your professional duty and this has caused you to go over budget, your professional indemnity insurance may cover a resulting compensation claim.

This can be a tricky area and coverage varies from insurer to insurer, so it’s best to check your policy documents or talk to your provider.

Does professional liability insurance cover breach of contract?

simply business professional indemnity insurance does not cover you if a client sues you for breach of contract. contractual liability is excluded from coverage.

does professional civil liability insurance have vat?

There is no VAT to pay on professional liability insurance, but there is an insurance premium tax (ipt) in place, which will be added to the cost of your policy.

Professional Liability Insurance is subject to IPT’s standard rate, which is currently 10 percent. when you simply use businesses to compare quotes, the prices you see will include ipt.

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