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If you provide advice, design or specifications for a fee, you will need professional indemnity insurance including all Professionals and Consultants from Acoustic Engineers to Zoologists. You will need professional indemnity insurance if your business is:
What does professional indemnity insurance provide?Professional indemnity insurance protects against defence costs and awards should a client allege that his business has suffered due to your negligence. Many clients will only engage your services once you have provided evidence of insurance and if you employ sub contractors, it is essential that you check their professional indemnity insurance before you engage them. Ensure you are properly insured from Day OneYou need to have professional indemnity insurance in place the day you start your business. Professional indemnity insurance policies are issued on a "Claims Made" basis which means that a claim made years after the alleged negligence will be met by the current policy and not the policy which was in force at the time of the alleged mistake. It is therefore essential to ensure that the "Retroactive Date" shown in your current professional indemnity insurance policy is the commencement date of your business and not the inception date of the current policy . Most underwriters will only provide retroactive cover if all previous years have been insured. When you close your business or retire, you will need to arrange "run off" insurance cover for several years afterwards. Keep everything well documentedYou need to set out your responsibilities in a contract with your client before you start work and keep copies of all instructions, modifications and complaints. You shoulkd also notify your insurers immediately you receive a complaint or intimation of an allegation of negligence, even if you believe the allegation to be groundless. Your professional indemnity insurance provider will only deal with claims made during the currency of the policy and as this is a specialist area of insurance, you should always seek advice from a suitably experienced insurance broker.
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