Professional indemnity insurance (PI insurance) – provides cover for the legal costs and expenses involved in defending a claim, as well as compensation payable to your client if you are found to have given negligence advice or design in a professional capacity.
In professions such as financial advisors and accountants there is a legal requirement to have professional indemnity insurance in place. In most cases where you are providing advice or design there is now a professional expectation from the client that you hold PI cover.
You should consider PI for the following reasons:
- You provide an expert service
- In case you make a mistake in designs, plans or calculations
- You handle people’s information
- You could face claims if you accidentally disclose data or infringe on a client’s legal rights
- Many clients will require that you have professional indemnity insurance in place before you can start working for them
- You might belong to a professional body or industry association where professional indemnity insurance is compulsory