Frequently Asked Questions: Professional Indemnity Insurance

Can I cover any previous business activity?

Yes, this is because professional indemnity insurance cover can include predecessor practices or partners’ liabilities arising out of former partnerships elsewhere.

What is contractual liability?

This can be defined as liability that does not arise by way of negligence, but instead by assumption under contract or agreement. Some PI insurers offer to cover an element of contractual exposure in order to meet certain basic professional needs of the insured party.

What will I be covered for with PI insurance?

Your business will be covered against claims for loss, or damage, made by a client, or third party, if you make mistakes, or are found to have been negligent. PI insurance also covers legal costs.

Why is professional indemnity insurance necessary?

Today society is increasingly compensation-minded, and anyone who has defended a negligence claim will be aware that it can be an extremely stressful experience with very high costs. Insurance against such circumstances is a necessary requirement of professional practice. You can also use it as a great marketing tool to set you apart from your [...]

What is contractual liability that is not caused by negligence?

This is when a professional signs up to a contract which might impose a liability that goes beyond what one would normally expect. Contractual liability that is not caused by negligence is often excluded from professional indemnity insurance policies.

How long will it take to arrange cover?

The application process is done online. This provides a quick and efficient process when applying for professional indemnity insurance, and you will be covered immediately.

Is PI insurance compulsory?

Professional indemnity insurance is not a legal requirement, however, many companies may insist on a contractor or a consultant having PI insurance cover in order to then take up work.

What is civil liability?

Civil liability will cover areas such as breach of contract, libel and slander. Civil liability can be included as part of a professional indemnity insurance policy.

Who needs PI insurance?

Anyone who sells knowledge or skills will require PI insurance. It is important that you invest in a professional indemnity insurance policy in order to make sure that you are protected against a number of unfortunate circumstances that may arise.

What is breach of duty?

A typical PI insurance policy will provide indemnity to the insured party against the loss arising from any claims for breach of duty which may be made and reported to the insurers during the period by reason of any neglect, error or omissions committed in the conduct of the insured professional business.