Guest article by Phil Ainley, Caunce O’Hara
The freedom you gain by working as a freelancer or contractor is a massive draw for a lot of workers, but one key thing to remember is when you work for yourself you do not have the same level of protection that being a full-time employee offers you.
Being insured is key and a policy you ought to have in place is Professional Indemnity insurance (PII).
What is Professional Indemnity insurance?
If you offer professional advice, services or designs that are deemed incorrect and your client suffers a financial loss, they could make a claim against you. PII insurance will cover the costs of your legal defence costs if a client takes legal action against you. For professionals offering advice and services in the UK, it is an essential type of insurance.
What does PI insurance cover?
It’s important to remember that PII will only cover you for making a mistake.
If you are negligent in your work, or you promise something to a customer that you can’t deliver, professional indemnity insurance can cover you for mistakes including professional negligence, unintentional breaches of copyright or confidentiality, Data Protection Legislation Prosecution defence costs and loss or damage of documents.
Do I need PI insurance?
Even though PII is not a legal requirement, it is highly recommended and, in a lot of cases, clients won’t even consider engaging you if you cannot prove you have the correct insurance cover in place. So from that point-of-view Professional Indemnity insurance can be viewed as a sound business investment for freelancers, contractors and SMEs alike.
You could be liable for thousands of pounds if you offer advice or a service which leads to your client losing money. If you carry out any of the following business activities, you should consider professional indemnity insurance.
- Offering advice or professional services to clients as a contractor or consultant
- Providing designs as a designer, architect or engineer
- If a client requests that you take out professional indemnity insurance
- Part of an industry regulator or professional body that requires insurance coverage to be a member.
Professional Indemnity insurance is not prohibitively expensive, but your premium will depend on your occupation, the level of cover you require and the excess on the policy.
For further information and a quote please contact our award-winning Schemes team on 0333 321 1403.