To appreciate the essential benefits of professional indemnity insurance, just think about the consequences of being without it. You could lose your reputation, your business, your livelihood. In short, everything you have worked to build up.
If you’re a freelancer, contractor or consultant – if you offer any kind of professional advice or service for a fee, either as an individual or as a business – you need professional indemnity insurance. Not to put too fine a point on it, professional indemnity insurance will protect you against any loss or damage that might result from your actions.
Not relevant in your case? Think again. It’s no slur on your professionalism to say that we all make errors now and again, particularly when the pressure is on. We’re none of us perfect. And even what seems like a minor error - putting a wrong figure in a document or the wrong telephone number in an advertisement - can have very costly consequences.
When that happens, professional indemnity insurance will cover your defence costs if you’re sued and, should a judgement be made against you, the cost of any compensation. Who wouldn’t want to have that kind of peace of mind?
And with the right professional indemnity insurance, you will also be covered for the cost of rectifying any mistakes - often the simplest method for resolving a dispute but potentially expensive for you if it means work you hadn’t anticipated.
There are other advantages too. It may not have been you who made the mistake. It may have been one of your employees, or sub-contractors. Maybe a mistake wasn’t even made. Suppose a client simply doesn’t think your professional services were as professional as they should have been and a dispute develops that ends up in a costly court case?
Once more, professional indemnity insurance will pay for your legal fees - and, in case you hadn’t noticed, lawyers don’t work for nothing in this day and age.
