A typical Professional Indemnity insurance policy will provide protection to the insured against loss arising from any claim or claims. This may be for breach of duty which may be made and reported to the insurers during the policy period by reason of any neglect, error or omissions committed in the conduct of the insured’s professional business.
Professional indemnity cover was historically taken out by the individuals who were seen as implementing the ‘Professional Trades’, people such as Solicitors, Surveyors, Accountants, Engineers and Architects. The term ‘Professional’ is now generally given to any person who offers specialist advice, design, specifications, supervision etc. Whether this is for a fee or gratuitously, they owe a duty of care to their client, and third parties.
The list of people who provide a service and are considered to now be ‘Professionals’ include IT Consultants, Business Consultants, Project Managers, Design and Construction Firms, Marketing Consultants, Management Consultants, Recruitment Consultants and PR Consultants.
If an allegation of negligence is upheld the professional is likely to be liable for the losses incurred by the plaintiff which arise as a reasonably foreseeable consequence of the professional’s actions. The professional will often also be responsible for the plaintiff’s legal costs and these can be substantial.
PI insurance is compulsory for some professional trades and services. Today’s commercial environment is becoming increasingly litigious with clients seeking compensation much more frequently than in the past. Even if the allegation made against you is false, the legal costs involved in defending the claim can be very high.
Without valid professional indemnity insurance cover you will be left to defend the allegations and will have to instruct a lawyer and pay for the subsequent legal costs involved.
If you world like more information regarding professional indemnity insurance, contact Hensure.