What is professional indemnity insurance?

What is professional indemnity insurance?

Professional indemnity insurance is a type of cover to protect your business if you provide designs, specifications, advice or instructions as any part of your job. If any of your recommendations or advice have caused a financial loss for a client and you’re found to be at fault, this is the cover that will keep you safe.

What kind of business needs professional indemnity insurance?

If you’re a company or self-employed person who provides professional services, recommendations or advice, and might be unable to cope with the expense of defending a costly claim, professional indemnity insurance could be an incredibly important investment.

It isn’t always required by law but is often required by regulatory or professional bodies. Plus, many companies find it instils a degree of confidence and credibility in their organisation and the work they do. As a certified insurer, AXA understand the needs of complying to professional standards.

By choosing our professional indemnity insurance, you’re planning ahead, protecting yourself of any future consequences and helping your business continue in the aftermath of an unexpected claim.

When would I need professional indemnity insurance?

It’ll protect you if you provide designs, specifications, advice or instructions as part of your job.

If something you’ve done or recommended results in a financial loss for your client and they decide to take you to court, this’ll help you with your costs. It can take a while for the issues caused by professional consultation/bad design to come to fruition, and you need to be prepared to handle the consequences.

That’s why you’ll also get the option to purchase cover for work you’ve previously done – even if you’re retiring or shutting up shop. It may also help you win contracts too, as some clients will only work with companies who are appropriately insured. Again, your membership of trade bodies may be dependent on whether you have professional indemnity insurance or not.

How much professional indemnity insurance do I need?

It’s totally dependent on the kind of business you run: what size you are, the kind of work that you do, and the scale of the contracts that you work on. Professional indemnity can protect work you’ve done in the past, so how much insurance you need will depend on how established your business is and how much of your previous work you want to protect.

AXA’s tailorable business insurance offers you:

• Choice of cover levels (up to £5 million)
• Paid defence costs – including solicitors’ fees and expert counsel
• Up to £250 compensation per day for directors / partners / staff to attend court

Optional extras:

• Legal expenses
• Business equipment

And with specialist policies that can be tailored to certain professions (IT, accountancy, recruitment and more) – AXA lets you choose the cover to fit your needs.

Is professional indemnity insurance compulsory?

Whilst professional indemnity insurance is not a legal requirement, it is often compulsory before membership of a chartered body. Having this cover could be an important investment in your future – and could prevent you from having to pay large sums of money to defend a claim.

If you provide professional services or advice, then professional indemnity insurance could be invaluable. Plus, some clients will only work with businesses that have professional indemnity, so it could be an important business boost for you.

How much does professional indemnity insurance cost?

That depends on the amount of professional indemnity insurance you opt for, and the level of cover you decide on. Every business is unique, and so the cost of your tailored insurance depends on what business you have, your turnover, your excess and the kind of work you do.

The quickest way to find out how much your insurance would cost is to get a quote online.