What is professional indemnity insurance?

Why a home business should take out professional indemnity insurance

This guest post explains the need for services or advice-based home businesses to take out Professional Indemnity Insurance:

Terms like Professional Indemnity Insurance can be daunting to a layman, but the need for a comprehensive Professional Indemnity policy is unarguable once you understand the term.

We’re used to insuring our belongings and our buildings with things like home and contents insurance, but business has a far more lengthy set of demands where insurance is concerned.  Businesses operate in the public domain and your business, if successful, should be in a highly public arena of constant human interaction.

This puts you at the mercy of a highly litigious society. If things go wrong in the modern world many people will decide to make a compensation claim – often entirely justifiably.  Not all claims involve injuries to the person (which should be legislated against via a good Public Liability/Employer Liability insurance policy). Some claims involve negligence in the form of bad advice, professional negligence to your duties, loss of goods, libel, copyright or defamation. The possibilities for a court case are vast.  This is where Professional Indemnity Insurance becomes vital.

If you’re in the business of providing advice, such as financial services, accountancy, law, IT consultancy, design etc, you’ll need a comprehensive Professional Indemnity Insurance policy.  You’re insuring against a client claiming they have suffered unduly due to your advice or service.

Endsleigh.co.uk are a leading provider of Professional Indemnity Insurance and offer policies from as little as a few pounds a month.  It’s significant that these policies can cover you for damages in the region of £50,000 to £2million.  These figures are sure indicators of the ruinous nature of a professional negligence claim.  One slip up could well lead to the complete loss of your livelihood and hard work.

Professional Indemnity Insurance, also sold by the name of Professional Liability Insurance, is a vital part of any services or advice based business. So make sure to obtain a policy that gives generous amount of cover against a host of eventualities.