What is professional indemnity insurance?
Professional indemnity (PI) insurance is a type of business insurance cover. You can buy it as a standalone policy or add it to a larger business insurance package.
PI insurance can cover you for claims made against you or your business for professional negligence. If a client claimed you provided advice or services that caused financial or reputational loss, PI insurance could potentially cover the compensation owed for loss or damage the client may have suffered, as well as any related legal costs.
Why is professional indemnity insurance important?
Professional indemnity insurance may be an important consideration for your business if you provide expert advice or are trusted with confidential customer information.
When choosing whether to take out professional indemnity insurance, it is a good idea to think about how much your business could afford to pay out in the event of a successful claim.
This is because clients can make a claim against you if they believe the service or advice you have provided has caused them to lose out financially, or caused damage to them in some way. If they are owed compensation as a result, professional indemnity insurance could cover this cost. Without this type of insurance, your business could be liable to foot the bill.