Professional Indemnity Insurance FAQS

Professional indemnity insurance is a complex policy that ensures business owners are adequately protected in the event of a claim against them. Whether you are a small business or a big corporation public liability and professional indemnity insurance is vital for keeping your business afloat. However, we understand that it can be difficult to digest, so we have put together some answers to your frequently asked questions and hope that they will reassure you before you decide on your policy.

Who needs professional indemnity insurance? 

If you offer advice or a service that could end in financial loss if there is an error, we recommend that you have PI insurance. When you work in a business that offers advice or a service that could negatively affect your clients if you make a mistake, then a professional indemnity insurance policy will help you to pay for any financial loss that may incur if they make a claim against you. This is particularly good for lawyers, architects and even personal trainers.

What level of PI insurance do I need? 

The minimum level offered by insurers is usually £100,000. If your limit of professional indemnity is not specified by a regulatory body or contractual obligation, then the choice of limit falls to you as a business decision. When it comes to public liability and professional indemnity insurance it is good to break down what the cost to you would be if a claim was made against you, so the figure may be higher than you expect. If you need advice on this, our team of chartered insurance brokers are happy to discuss your needs and find the perfect policy.

What does Professional Indemnity insurance cover? 

Professional indemnity insurance covers the work you undertake as a business and the advice you may give in your professional capacity. It will cover you for any errors/omissions which may cause a financial loss to your client and defence costs that you need if a claim is made. If you work in an area, such as architecture, that could have serious consequences, so it is best to find a comprehensive policy that will completely protect you. When you purchase a professional indemnity insurance policy with Higos, we take the time to go through all of your circumstances and ensure that you are not left underinsured.

How long do I need PI insurance? 

If your business has to refer to regulatory bodies or contractual requirements, you may find that you have to hold professional indemnity insurance cover for a specified period. However, as professional indemnity is written on a claims-made basis, it is the policy in place at the time the claim is made that will pay out.  It is advised that you keep your cover in place even after you ceased trading. This means you will be covered in any previous work that you have carried out. This is known as runoff and the length of time you hold cover will vary on a case-by-case basis. If you are unsure of how long you will need PI insurance, speak to our expert team.

Professional indemnity insurance is not a legal requirement. However, many professions are required by their regulatory body to hold PI insurance and it can also be a contractual requirement. We also strongly recommend holding a policy as the financial loss from claims can be significant, you could get this as part of a wider commercial insurance policy. If you would like to discuss this, please contact our expert team.

What is the difference between public liability and professional indemnity insurance? 

Public liability insurance covers you for any injury or property damage which may occur to a third party, whereas professional indemnity will cover you for the service or advice provided by your business. Both types of policy are vital for having peace of mind when running a business, and will financially protect you in the event of a claim. Our expert claims team are on hand to help should you need it. This is another reason to choose Higos, we always prioritise you, long after you have purchased your policy.

How much will a PI insurance policy cost? 

Professional indemnity insurance quotes depend on a variety of factors such as turnover, business activities, jurisdiction and level of cover required.  Therefore, costs will vary from case to case. At Higos, we take into account, a variety of factors to ensure that your business is not under or over-insured. Whether you are a small business or a large organisation, we can help.

What does the retroactive date on professional indemnity insurance mean? 

Although professional indemnity insurance policies are made on an annual basis, the retroactive date is the point from which any work carried out will be covered in the event of a claim. This is provided that the policy is live. Therefore, any work carried out before the specified date would not be covered by the policy. However, if a retroactive date is not specified i.e. “none” this means there is no cut-off point for previous work carried out and you could be protected for longer. When you take out your policy, our team at Higos will explain the details, so you know what to do if a claim is made.

If you need a professional indemnity insurance policy, make sure you get in touch with our expert team. We will go through the policy with you and ensure each of your needs is covered. From large corporations to small businesses, it has to be Higos. Request a callback or contact us today.