What are the benefits?
For many small businesses, public liability and professional indemnity are the foundation of their business insurance. While public liability deals with physical mishaps, professional indemnity focuses on the quality of your work and advice.
Reputation is vital in business, and nobody wants to tarnish their reputation due to a mistake or misjudged piece of advice. While the consequences of these can vary across professions, the negative impact on reputation is universal—a bad reputation can cost you work.
The key benefit of professional indemnity is that it allows you to take care of your clients, reimbursing them for any losses and protecting your finances as you navigate the associated legal fees, expenses, and compensation if they make a claim.
When might I need PI insurance?
There are several scenarios where this type of insurance can protect your business.
Loss causing advice
If you give your client advice and they believe it caused them harm or cost them money, they could pursue compensation. Typical examples are business advice that caused a drop in revenue or practical advice that led to personal property damage. Medical professionals and therapists are also vulnerable to claims, as their advice has the potential to cause physical harm.
Negligent work
In some lines of work, even a tiny mistake can have notable financial consequences. An accountancy error could result in a client receiving a fine, an architect's miscalculation could translate to a costly building error, and a medic's negligent work can lead to bodily injury, longstanding health implications, and even death.
Breach of confidentiality
If you accidentally disclose a client’s confidential information or data or infringe a copyright, trademark, or intellectual property, you could be pursued for costly compensation.
Defamation
If you make a comment deemed defamatory, you could receive a claim for reputation damage and loss of revenue.
Loss of information
A client can claim for the cost of replacing or restoring lost documents or data that were in your care.
FAQs
Can I take out a short-term pi insurance policy?
While you could, this could be risky since professional indemnity works on a claims-made basis, and without a run-off policy, you could find a claim made at a later date isn't covered.
I’m self-employed and work from home, do I need this cover?
Yes. Because the claims that professional indemnity covers relate to the quality of your work, it doesn’t matter where you work - you could still be found liable.
Is professional indemnity tax deductible?
Yes, this insurance cover is classed as an allowable expense for tax purposes.
Claims pertaining to the standard of work can be particularly stressful. Get in touch with Park Insurance today to see how our tailored professional liability policies can strengthen your business and ease your concerns about reputational and financial damage.