Professional Indemnity Insurance

If you are in the business of selling advice and your professional expertise you should consider taking out professional indemnity insurance. Many people believe that this is covered by their public liability insurance - but it is important to note that most public liability insurance policies exclude claims arising out of advice, design and specifications made or given for a fee.

In broad terms professional indemnity insurance protects your business against claims made against you arising out of your negligence in the provision of your services, the cover importantly also provides for your legal costs in defending such actions. Even when you are found not to be responsible he legal fees associated with such claims can be very high.

Most professional indemnity insurance is written on a "claims made" basis - this means that the policy protects you against claims made against you in the current period of insurance. This is very important as you should ensure that your cover is up to date and offers protection to you in respect of work undertaken in prior years. Similarly, when you cease trading, it is also important to consider "run-off" cover to protect you against claims that may be made against you in the future.