7 golden rules to avoid a professional indemnity claim

PolicyBee have already taken a tongue-in-cheek look at professional indemnity insurance, and today’s sponsored post returns to the subject:

Professional indemnity insurance is a valuable safety net for small businesses.

If a customer claims your work isn’t up to scratch, it pays for legal fees and compensation to sort things out.

But, just because you have a safety net doesn’t mean you can rattle through projects willy-nilly.

Stick to the following risk management tips and, hopefully, a professional indemnity claim will be just something that happens to other people…

1. Use written contracts and clearly worded Ts & Cs. Get your client to sign them.
Without this, potential claims against you will be almost impossible to defend. Your terms and conditions should include both parties’ responsibilities.

2. Manage your projects carefully.
Early on in the project, agree timescales and establish what your client expects you to deliver. Communicate regularly with your client, even if it’s just to let them know there’s been no change.

3. Be transparent.
If it seems unlikely you’ll make a deadline, or you can’t do what your client is asking, let them know sooner rather than later. Make sure project documents are available to everyone at all times.

4. If you’re using third-party media, always get the right licenses.
That includes images, film, or music. If you don’t, you could find the creator or owner suing you for intellectual property infringement.

5. Make sure subcontractors have their own professional indemnity insurance.
Using outside help to complete a contract can be risky. Regardless of who actually does the work, your client’s contract is with you and that’s who they’ll sue if it all goes wrong. Insist your extra pair of hands has professional indemnity insurance cover or you’ll be blamed – and have to pay for – their mistakes.

6. Get your client to sign off your work, in writing.
That way, they take final, legal responsibility for the project. And you’ll have a record of it, if you ever need to defend yourself.

7. Treat late payments cautiously.
Chances are it’ll all be fine. But if a late payment comes with a begrudging comment, it may be time to notify your broker about a potential claim.

This isn’t an exhaustive list, but these tips are a good place to start when it comes to keeping your small business safe from a professional indemnity claim.

And remember, you can always ask your broker for advice if you think you have a problem. Don’t worry about being over cautious: if it stops a professional indemnity claim in its tracks, your insurer will thank you for it.

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.

Or follow the links for PolicyBee’s down-to-earth advice on insurance for home workers, covering your home office equipment and why you shouldn’t have such a jaded view of small business insurance claims after all.