Professional Indemnity Insurance

Professional indemnity insurance for many different markets and professions - solicitors, accountants and a wide range of other professional occupations. It is essential if you are in the business of selling knowledge based skills i.e. architect, engineer etc. That you seriously consider the benefits of taking out comprehensive cover.

It is not however just the traditional 'professional' trade's that need to be covered. The scope, definition and responsibilities of the new 'modern' professional have distinctly changed over recent years.

Modern society now relies heavily on services provided by other individuals and organisation's. This means any person who offers 'specialist advice or service' needs to look at being covered by an adequate professional indemnity insurance policy.

This type of insurance protects your business against possible compensation sought by a client in the event that you have made mistakes or are found to have been professionally negligent. Professional indemnity also covers any legal costs that may arise from this action.

Action for compensation might also occur where a client suffers a financial loss as a result of alleged mistakes or omissions on your part. You could even be sued by a client who is merely dissatisfied, but has no valid claim, leading to substantial legal costs and time away from contracts. Such claims are rare.

The professional person must exercise whatever degree of care and skill is reasonably expected of any competent practitioner in that profession at that time. The standard UK Indemnity policy will cover the following actions:

• Libel and slander
• Loss of documents
• Dishonesty of employees
• Fidelity
• Unintentional breach of confidence
• Infringement of copyright and intellectual property rights
• Previous firms or previous partners
• 'Run off' cover can be arranged for companies who cease trading

You should always ensure you and your business colleagues are properly covered. Make sure that you are covered both at the time of the event and when the claim is made. This can be particularly important bearing in mind there can often be a long delay between an event and a subsequent claim.

If you plan to cancel your policy when you close your business or retire you may need to arrange "run off" cover for an extended period of time.

Make sure to keep all your business projects and contracts well documented, this is one way to minimise any liability claims that may arise. Always clearly set out specific responsibilities in your contracts with clients before commencing a project and deal with any complaints swiftly.