Professional Indemnity Insurance Explained | What Is It? | Towergate

Professional liability insurance is a type of liability insurance designed to protect companies and individuals who provide advice or expertise to others.

See also: What is Life Insurance? Life Insurance FAQs | Royal London – Royal London

Also known as professional liability insurance or errors and omissions (e&o) insurance, this coverage is designed to protect you if a client alleges that you provided faulty or inadequate advice and services. If you have professional liability insurance, the cost of your legal defense will be covered, along with any compensation you may have to pay to the client following a claim against you.

Reading: What is professional liability insurance

Professional indemnity insurance should not be confused with other types of business insurance that cover more “tangible” claims, such as:

  • civil liability insurance

    Coverage for claims made by third parties (members of the public) if your property is injured or damaged during the course of your work.

  • employer’s liability insurance

    A legal requirement if you have employees, this coverage protects you if someone you employ claims compensation due to an accident or illness that has arisen as a result of their work with you.

  • product liability insurance

    If a member of the public is injured, becomes ill, or their property is damaged as a result of a product you have manufactured, supplied, or distributed, you could be liable. product liability will cover compensation and your legal defense.

    what does professional civil liability insurance cover?

    • your legal defense

      If a customer files a claim against you, you will have to defend yourself in court, whether your claim is justified or not. pi will cover the legal expenses associated with the case.

    • compensation

      If a client wins their case against you, they will likely be awarded the amount of money they lost as a result of your advice. In addition, they may be awarded compensation. both are covered by a pi policy.

    • escape lock

      If your business goes out of business, you may still have an unexpected claim in the future. run off insurance is to ensure that these claims are still covered and that you are not liable.

      what is professional liability insurance?

      Professional liability insurance is a type of liability insurance designed to protect companies and individuals who provide advice or expertise to others.

      See also: What is Life Insurance? Life Insurance FAQs | Royal London – Royal London

      Also known as professional liability insurance or errors and omissions (e&o) insurance, this coverage is designed to protect you if a client alleges that you provided faulty or inadequate advice and services. If you have professional liability insurance, the cost of your legal defense will be covered, along with any compensation you may have to pay to the client following a claim against you.

      Reading: What is professional liability insurance

      Professional indemnity insurance should not be confused with other types of business insurance that cover more “tangible” claims, such as:

      • civil liability insurance

        Coverage for claims made by third parties (members of the public) if your property is injured or damaged during the course of your work.

      • employer’s liability insurance

        A legal requirement if you have employees, this coverage protects you if someone you employ claims compensation due to an accident or illness that has arisen as a result of their work with you.

      • product liability insurance

        If a member of the public is injured, becomes ill, or their property is damaged as a result of a product you have manufactured, supplied, or distributed, you could be liable. product liability will cover compensation and your legal defense.

        Do I need professional liability and indemnity coverage?

        read our guide on ‘what is the difference between professional liability and general liability insurance?’.

        towergate liability insurance

        For more information, please see our product liability insurance webpage or call us on 0344 892 1664.

        Do I need professional liability insurance?

        Regulators in your industry require some professions to have professional liability. this includes:

          • financial advisors
          • lawyers
          • architects
          • registered surveyors
          • health professionals
          • While not a legal requirement for everyone, it is worth considering professional indemnity from any company or sole trader that is in the business of offering advice, knowledge or skills as part of their services. It’s also worth remembering that with this type of coverage, you’ll be protected regardless of whether a claim is justified or not.

            Furthermore, one of the most exciting business trends of recent years is the rise of independent consultants and small businesses, offering highly specialized knowledge, skills and advice to clients and clients.

            Offering this type of service is not risk-free. mistakes happen from time to time, and without proper coverage, they can be costly.

            examples of professional compensation claims

            Depending on your industry, the types of professional compensation claims you might encounter will vary dramatically. for example, a misspelling in a print ad could land the responsible marketing agency in trouble.

            That said, there are some common statements that affect most industries:

            • professional negligence

              This occurs when you make a mistake while doing work for a client. for example, if an engineer designed a heating system for a large hotel lobby but did not consider its size properly, which means that the installed radiators did not heat the area sufficiently and the system had to be removed and redesigned.

            • See also: Isotretinoin (Accutane, Roaccutane) & Acne

              loss of money or property

              If your client trusts you with money or property that you later lose, you could sue. A typical scenario would involve a shoemaker being entrusted with a customer’s shoes: they are legally responsible for the safe storage and return of the shoes.

            • loss of documents or data

              When business documents and data are lost, companies risk having their trade secrets fall into the hands of their competitors. If an IT contractor loses confidential information, a claim could be filed against them.

            • defamation: insults and slander

              Liberal and slander insurance covers you against a lawsuit in the event that someone feels you have written or said something defamatory about them that is also false. slander is the term for everything that has been said and libel for everything written.

            • violation of copyright or confidentiality

              accidental use of someone else’s intellectual property can be a costly mistake. If a graphic designer uses a font without permission, he is breaking copyright law and could be sued.

              How much professional liability insurance do I need?

              Professional indemnity insurance is often sold with variable limits. To decide how much professional liability insurance you need, you should consider:

              • the size of your business
              • the size of the clients you are dealing with
              • how much it might cost to defend yourself in court
              • Is your industry regulated?
              • The amount of coverage required will depend on the amount of exposure your client has.

                If you are in an industry that requires you to have professional liability due to regulations, there is likely a recommended amount of coverage associated with your profession. you can check this with your regulator to make sure you are covering the amount required from you.

                Do I need professional liability and civil liability insurance if I’m going to start my own practice?

                Starting your own practice can be an exciting time, but it can also be daunting to go out on your own, particularly with all the setup costs involved. When it comes to insurance, you need to consider whether you can afford not to have it. faith chapman of towergate insurance explains why professional liability and liability insurance is important:

                Professional indemnity coverage will protect you against any claims made against you in the event you are accused of professional negligence, this can include things like incorrect recommendations or advice, breach of professional code of conduct, loss of documents or breach of confidentiality. A client could claim that as a result of a recommendation you made in a session, they have suffered an adverse effect and have been harmed as a result. this type of policy will cover the costs to defend you against this accusation and ultimately, if the client is successful in suing you, will pay any damages awarded.

                Public liability coverage will protect you in the event of claims related to accidental injury or damage to a customer or member of the public, and also covers loss or damage to public property. If, for example, you accidentally spilled coffee on a client’s laptop, this would be covered or if a client tripped while visiting you, this policy would cover the legal costs to defend you and pay again if the client manages to sue you. .

                small business professional indemnity insurance

                a survey found that 75% of small business owners are concerned about making professional mistakes, yet less than half of those giving advice to clients purchase professional indemnity insurance.

                If you’re a sole trader or run a small business, your customer base and budget may be limited, but the cost of a claim against you can be detrimental without adequate coverage.

                professional civil liability insurance for companies like yours

                The recent rapid growth in the number of dynamic small businesses and freelancers in the UK is very exciting. Filling niches that never existed until recent years, this sector of the economy has a very positive future ahead of it.

                At towergate, our professional liability policy provides coverage for both professional liability and personal liability, meaning you only need one policy. visit our professional liability insurance page or call 0330 123 5128 for more information.

                See also: Average Cost of Teeth Cleaning Without Insurance