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Professional Liability Insurance

Are all Businesses Required to Take Out Professional Liability Insurance?

Professional liability insurance is most commonly referred to as professional indemnity insurance. This type of insurance is in place to cover you against all the financial consequences of mistakes you make on a professional level, or any other professional negligence. More often than not, professional indemnity insurance is taken out by those businesses that offer consultancy, design and advice services. At Quote Supermarket we have the experience to offer great protection for a competitive price – not something many people could afford to be without, and no one can know when you might need insurance the most. We know our deals are some of the best, but our service is what really makes a difference to customers during those difficult times.

When Do You Need Professional Indemnity Insurance?

If your business works in fields of advice or services to other businesses, you may want to consider this type of insurance. It covers a huge range of issues, but most importantly it will protect you in case you have been negligent in any of your business dealings. Negligence cases are almost always decided in favour of the business who started the suit. Although they have to prove that their financial loss is because of the negligence of the defendant, this is generally quite easy in the case of an advice providing business.

The reason for this is that when a company seeks advice (through real advice, consultancy or design), they expect this advice to lead them to an improvement of service which can be quantified as profit or other gains. If this improvement does not take place, it is very easy for them to blame the provider of said advice for this. After all, they were hired for a reason.

Let’s say you are an architect. A tiny mistake is made in a construction project’s plan, but this mistake is so small that it is not picked up on until work has actually started. All materials have been purchased, foundations have been laid and construction is underway. However, work has to stop because a mistake in architecture is incredibly dangerous. As a consequence, the client has lost money for wasted materials as well as being likely to lose money in the future because completion of the project will be delayed. A negligence claim in this case would be against the architect, and without professional indemnity insurance he would be faced with staggering legal bills and compensation for the other party.

Who Takes out Professional Indemnity Insurance?

Professional indemnity insurance can be taken out by any kind of business. However, it is most common in:

  • Accountancy
  • Information technology consultancy
  • Business consultancy
  • Journalism
  • Architecture
  • Engineering
  • Surveying

These professions often see that their liability law suits go into the tens of thousands, if not hundreds of thousands of pounds. These are amounts that most businesses are simply not able to lose. The cases often require not just a repayment of the costs paid to the consultancy agency itself, but also payment of additional compensation. Then, there are all the legal fees and the fact that the consultancy company will be out of work for a period of time. This is enough to cripple a business and why it is so important to take out professional liability insurance. Call Quote Supermarket today to discuss your needs – or use our online service to get a quote straight away.

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