Why you don’t need professional indemnity insurance

PolicyBee are back with more down-to-earth information about home working insurance.

Ever thought you probably don’t need professional indemnity insurance?

Today’s sponsored post plays devil’s advocate and puts forward some common arguments why it’s not necessary…

Time to get serious
Last time, we talked about insurance for homeworkers. We covered all the big names: professional indemnity insurance, public liability insurance, employers’ liability insurance, and office insurance.

Now, in what might be considered a surprising move for an insurance broker, we’ve decided you don’t need professional indemnity insurance at all. In fact, we’re going to convince you not to buy it. So here we go.

Five reasons you don’t need professional indemnity insurance. No, really.

1. You work from home
You do business differently to those stuffy, corporate types in their me-too offices, right?

You’re living the dream: flexible working, no soul-crushing commute, and no need for a suit and tie. You’re under the radar. And definitely not part of that corporate blame culture, either.

So no one’s going to bother chasing you for compensation if it all goes wrong.

Except being under the radar doesn’t mean you’re invisible. And, unfortunately, your working environment has no effect on the work you do.

If you make a mistake that costs your client money, they won’t care if you work in an office, your kitchen, or out the back of a van. If anything, your small size makes you more vulnerable to big claims. You’re an easy target and there’s nowhere to hide.

It’s a shame that professional indemnity insurance levels the playing field, really. What with all that paid-for legal help and the financial muscle of a large insurer behind you. Otherwise you could do without it …

Still, never mind. Here’s a much better reason.

2. You don’t make mistakes
Too right.
What kind of reckless freelancer lurches from one botched job to the next? Not one who wants to get paid for a job well done, that’s for sure.

No mistakes = no need for insurance. Simple.

Sure, your clients can accuse you of making a mistake when you haven’t, or not doing what they asked. And did you know you’re usually liable for your subcontractor’s mistakes?
You’ll need a better defence than ‘it’s not my fault’ if you’re on the receiving end of a spurious allegation. You’ll need a decent solicitor too.

Of course, professional indemnity insurance helps protect the innocent, not just the guilty. Pays their legal fees and compensation if needs be, too.

OK, we’ll concede it *might* be quite useful here. Let’s move on.

3. You don’t take on that much work
If you’re semi-retired or work part-time, the odds are in your favour.

It’s simple numbers really. Fewer contracts mean less work which, naturally, means less chance of something going wrong. The risk you face isn’t enough to justify something heavyweight like a professional insurance policy.

Yes, it’s true you only need make one mistake to create a big problem for your small business. And that mistake could be with your first contract, your last contract, or the only contract you ever have.

That would be astonishing bad luck. Wouldn’t it?

It would. But you could always change that by keeping some PI insurance on the side, just in case.

(Only because we hear luck is where preparation meets circumstance …)

4. You have great relationships with your clients
You and your clients get on like a house on fire. You understand what they want, and they know what you’ll deliver.

Even if something does go wrong, you can work it out amicably.

Except when there’s money involved. That ‘good relationship’ doesn’t count for much if your mistake has a detrimental effect on your client’s bottom-line.

Which we suppose is fair enough. Perhaps you should protect your business with something more than a wink and a smile after all.

We hear PI insurance works pretty well.

5. Professional indemnity insurance is too expensive
Don’t let that interest-free Direct Debit convince you otherwise. Professional indemnity insurance costs. There’s no way millions of pounds of financial protection is cheap.

Besides which, just think of all the other things you could spend a couple of hundred quid a year on. A new laptop? Well, not quite. A well-earned skiing trip? Um, no. Some quality business stationery? Yes, definitely! We knew there was something.

Even if it does all go wrong, you probably know a solicitor who can offer you mate’s rates. And you can always sell something to cover your client’s damages. Your house, for example.

Hang on. Did we say PI is only a couple of hundred quid a year? Yes, yes we did.

In fact, it can start at around half that. OK, fair enough, we give up.

Perhaps professional indemnity insurance isn’t such a bad idea after all. It’s clearly a great safety net when it comes to protecting your business.

It’s dependable, and it helps protect your reputation. And when you’re a small business working from home, reputation is absolutely everything.

If you’ve decided you need professional indemnity insurance and you’d like a bit more information about it, feel free to give us a call. We’ll try not to put you off.

PolicyBee is a specialist professional indemnity and business insurance broker born in CEO Iain’s shed because he was so frustrated at how confusing and difficult it was to get business insurance. Policybee is independent, digital, and understand the problems a young, modern business has because it is one. Although it’s no longer run from the shed.

Do you have any questions about why home workers need professional indemnity insurance? Or about any other kind of insurance? Let us know in the comments and PolicyBee will answer them in future posts.

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