Originally written by Edward Murray on Small Business
What is professional indemnity insurance?
Every business wants happy clients. Do a good job for them and you will get repeat business, generate referrals and build a great reputation. But sometimes things do not go to plan.
If you give professional advice, you may face claims from clients if they think it was not up to scratch and has had a negative impact on their finances and their brand. Professional indemnity insurance can help meet the costs of defending and settling these claims.
Who needs professional indemnity insurance?
Professional indemnity insurance is not a legal requirement, but many professional bodies and/or sector regulators stipulate that practitioners must have cover in place.
For example, the Solicitors Regulation Authority sets out minimum insurance requirements, while accountancy bodies such as the Institute of Chartered Accountants in England and Wales also requires members to have cover.
But the need for professional indemnity is wider than the traditional professions. It could extend to virtually every person or business giving advice to clients.
This includes life coaches, tutors and health practitioners, as well as web developers, graphic designers and management consultants. It also includes people who work as freelancers or sole traders.
The Chartered Insurance Institute sums