Professional Indemnity Insurance (PI)

Providing Advice To Your Clients?: Then You Need Professional Indemnity Cover

 Professional indemnity insurance is designed to provide you with financial protection in the event of a claim being made against you on the grounds of your negligence. Negligence, however, can a difficult concept to define (which is one of the reasons why the legal costs of defending a claim can be so high).

But one thing is certain.

If you present yourself as a professional and you’re engaged by a client on that basis - an expert in your field - it’s not just what you do (an act) that counts. It isn’t even just what you don’t do (an omission) that counts. Your duty of care can extend to what you say or don’t say as well.

In other words, if you provide advice to clients in a professional capacity, you definitely should have professional indemnity cover.

For example, take the case of an IT Consultant who recommends that a client should purchase some particular hardware or software to meet a particular requirement. If the recommended system proves to be inadequate for the job, it will be no defence for the IT Consultant to claim that because he didn’t build the computers or write the programs then it isn’t his fault. His poor recommendation will, very likely, be viewed as negligence and a claim for damages will very likely follow.

Similarly, if a Management Consultant advises a client to implement a new marketing strategy to increase sales of a particular product, she won’t be able to put the blame on customers for not buying if the promised increase fails to materialise. Once again, a claim for negligence could be looming.

Even if the advice you give is carefully hedged with caveats and provisos, there is still a very real risk that a client, particularly a large corporation with sufficient resources, will decide to sue you anyway if something goes wrong and they think they can blame you. Without professional indemnity cover, forced to finance your own legal costs, you could find yourself out of business very quickly.

If you provide advice, calling 0161 833 2100 or email info@freelanceinsure.co.uk. for some advice on the professional indemnity insurance you need.

The Benefits Of Industry Specific Professional Indemnity Policies

 If there’s always going to be a doubt in the back of your mind about whether or not an insurance policy is going to pay out in the event of a claim, there’s really not much point in taking out that insurance policy at all

And that’s why you should only ever consider an industry-specific professional indemnity policy. Because any professional indemnity insurance that claims to offer blanket cover irrespective of your actual profession, could turn out to be worth less than the paper it’s written on.

Why should this be so?

Look at it from the insurers’ point of view. They’re effectively offering to cover any costs arising from an act of negligence on your part. Given that what constitutes a negligent act (or omission) can vary considerably from one profession to another, and given that the financial consequences of a particular act (or omission) might amount to a few thousand pounds in one case and several million pounds in another, you can see why any reputable insurance company is going to need some way of defining the specific risks it is underwriting.

So it’s not surprising that reputable brokers that specialise in professional indemnity often list the specific professions for which they can provide cover. This list may only be indicative. In other words, if you don’t see your profession listed, that doesn’t necessarily mean they can’t arrange pi insurance for you. But it does mean that they will need to talk to you about what precisely your professional activities involve in order that they can understand the risks attached and tailor a specific indemnity insurance policy.

The message is clear. Don’t be taken in by offers of ‘one size fits all’ professional indemnity insurance supposedly suitable for every profession. No matter how cheap it might appear to be, it will almost certainly turn out to be a waste of money.

Much better to click on the link that follows to find the industry-specific cover that matches your indemnity insurance needs precisely.

Sued For Professional Negligence...It Won't Happen To Me.....Really?

Maybe for you, as for many other freelancers, the idea of being sued for professional negligence seems about as likely as winning the lottery. Not something that you take seriously. So the thought of taking out professional indemnity insurance is simply a thought you’ve never had.

But what makes you so sure that being sued won’t happen to you?

Is it that you’re so conscientious you could never be accused of negligence? Is that why you don’t think you need professional indemnity? Well, no matter how professional you may be, you’re still human. And humans make mistakes - particularly when under pressure - and whilst most mistakes can be easily rectified, others, even small ones, can have major consequences.

Consider something as apparently trivial as the marketing consultant who, distracted by an urgent call from one client, inserts the wrong telephone number in an advertisement for another. A small mistake but one that could result in a significant loss of sales for the second client as well as damage to his reputation.

Or the web developer who, with his mind on problems at home, makes a simple coding error in his update to a client’s ecommerce site causing the site to crash under testing and leading to a costly delay in its re-launch.

In both cases - and in many, many other similar cases right across the spectrum of different professions - the freelancers in question could find themselves the subject of a claim for professional negligence. And one thing is certain. They’ll be very glad indeed of their pi insurance when it happens.

But maybe you think that your relationship with your clients is so strong that they’d just accept that you’d made an honest mistake and leave it at that. Do you really think so? In a highly competitive business world where margins are tight? And even if you’re right about the generosity of spirit of your personal contacts, do you think their companies’ accountants and lawyers will take the same view?

Quite frankly, it’s much more likely that you’ll be sued. And without indemnity insurance, you could be facing the loss of everything you’ve worked for. Unless, of course, you happen to win the lottery the next day. Hmmm...

Yes, being sued really can happen to you - whatever your profession. So follow the link to make sure you have the professional indemnity insurance you need.

Or you might want to talk to some professional indemnity insurance experts. Which you can do by calling 0161 833 2100 or email info@freelanceinsure.co.uk.

PROFESSIONAL INDEMNITY: Are You Adequately Insured For A Bad Day At Work? 

The infamous bad day at work. We all have them from time to time. Something outside of work is weighing on our mind ... we get constantly interrupted by people we don’t want to talk to ... the people we do need to talk to aren’t available ...the sandwich shop has sold out of the one thing we wanted ...

And that’s when we make mistakes.

Mostly they’re easily spotted and easily rectified. But not always. Which is why professional indemnity insurance is so important.

But are you adequately insured? Do you have enough professional indemnity?

Well, that depends on the type of mistake you make. Because always remember, it’s not what you would have charged for the work without mistakes that matters. It’s the size of the financial loss the client suffers as a result of the mistake.

For example, a designer or a marketing consultant can’t charge very much for inserting a telephone number in a client’s advertisement. But inserting the wrong telephone number could cost the client a of lot money in lost sales. And that’s what our designer or marketing consultant would be liable for. 

Similarly, an IT contractor wouldn’t be able to bill many hours for simply reading a client’s specification. But if he misses a vital piece of information in that spec and then goes on to design a system that fails to meet the requirements, he’ll be liable not just for a great deal of remedial work but, quite possibly, for an element of the client’s lost productivity.

So the amount of pi insurance you need depends in the type of work you do. Or to put it another way, the size of the financial loss the client might suffer as a result of your action, or inaction, on a bad day.

To determine the level of cover you need, you should think carefully about what you do and the consequences that could follow. You might also want to do some research into how much indemnity insurance others in your industry typically hold.

Or you might want to talk to some professional indemnity insurance experts. Which you can do by calling 0161 833 2100 or email info@freelanceinsure.co.uk.

PROFESSIONAL INDEMNITY COVER: From Just £165 per annum 

One of the effects of the internet has been a downward pressure on the prices of a number of products and services that can be sold online. And this is certainly true of insurance, including professional indemnity cover.

Once viewed by many as almost prohibitively expensive, and only taken out by those who were required to do so either by law or by their profession, pi insurance cover is now available for prices as low as £165.

But does this mean that the standard of service has fallen?

Not necessarily. Competition, as always, ensures that the providers of poor service get punished. But it does mean that you need to check who you are buying your professional indemnity insurance cover from.

So before you simply go for what might look like the cheapest quote, make sure you ask the following questions about the broker:

• do they have the necessary expertise, i.e. an understanding of professional indemnity insurance and of the industry you work in?
• do they always place their business with only the most robust insurance companies?
• do they offer the flexibility to make changes to your policy mid-term?
• do they set low policy excess amounts?
• do they include important features, such as retroactive cover, in the headline price?
• do they run a fast, efficient and friendly claims handling operation?

And the good news is that you can get this standard of service and these kinds of benefits for just £165. As you’ll discover if you follow this link for your professional indemnity cover.

PI INSURANCE: What Kinds Of Claim Do People Make?

 It’s a good question to ask. After all, if you’re going to insure yourself against a particular risk, you want to know what that risk is. And professional indemnity insurance, whilst being one of the most important types of insurance for a freelancer, is possibly one of the least obvious.

In essence, indemnity insurance provides cover in the event that you cause a financial loss to a client through your professional negligence. And negligence can be construed in a number of different ways. To start with, in layman’s terms, it can include good advice that you should have given but didn’t; bad advice that you did give; actions that you should have taken but didn’t; actions that you did take but shouldn’t have. In more legal terms, these are often referred to as ‘acts of error or omission’ or ‘a breach of a duty of care’.

For example, a web developer might make a coding error in a modification to an ecommerce site causing the site to crash. If the client can claim to have lost sales while the site was down, a legal action for damages might be brought against the web developer on the grounds of her negligence. Similarly, a structural engineer might face a similar prospect if, having made an error in his calculations, a load-bearing wall fails to pass an inspection resulting in a costly delay to the building project.

Incidents like these may seem fairly clear cut. But the scope of pi insurance stretches more widely still to cover unintentional breach of confidence and unintentional infringement of intellectual property rights. So, a freelance management consultant who revealed sensitive information to a third party causing damage to a client’s reputation might be glad of his professional indemnity cover if the client brings an action against him. As might a graphic designer who inadvertently incorporates copyright material in her designs for a new corporate identity. Because in both cases, if the client can allege financial loss, legal action might very well follow.

Still the list goes on. Most professional indemnity insurance policies will also provide protection in the event that you commit an act of inadvertent libel or slander. And in instances where an employee of yours is found to have defrauded or stolen from a client without your knowledge.

PI Insurance: Accounting For Mistakes

When an accountant has been working with a client in good faith it can come as something as a shock when the client begins legal action against them. There can be several kinds of claim an accountant could face, such as a client suing in the belief that the accountant had got the audit advice wrong. They could sue the accountant for breach of the retainer, or the failure to provide services to an adequate level.

The second class of claimants is third parties who have in some way seen or relied on the accountant’s advice. There were a lot of these sorts of claims in the 1980s and the 1990s with people saying that accountants bought shares based upon the audited accounts.

Whatever the reason for the court case, those that have taken out professional indemnity insurance will be eternally grateful for it. Professional indemnity insurance provides essential financial protection in the event that a client suffers financial loss as a result of alleged neglect, error or omission.

Professional indemnity insurance will meet the cost of defending claims and any damages payable. There are numerous cases which attest to the absolute importance of accountants being in possession of a bullet-proof professional indemnity insurance policy.

One such involved an accountant whose brief was to prepare and submit a client’s tax returns. The returns were submitted late for several years running and penalties were imposed. The client alleged negligence against the accountant and sought substantial compensation.

Another involved an accountant who was employed to advise on the purchase of another company. The client wanted to offset the profits of their own company against the losses of the purchased company with a view to limiting any tax liability.

The accountant’s instructions were specific. They gave advice on how to achieve the least tax liability and recommended that the best way was for the two companies to abridge their accounting periods to that of the same length. This advice was not entirely correct and the client company did become liable for stock relief claw back. The accountant was pursued for negligent advice.

IR35 TAX PROTECTION INSURANCE: Don’t Get Caught Between A Rock And A Hard Place

 Disputes with HMRC (aka the taxman) can be protracted, worrying and potentially very expensive. IR35 insurance can save you time, anxiety and money.

Perhaps you think it will never happen to you. After all, you and/or your accountant are scrupulous in keeping the books and filing your returns on time.

Don’t be so sure.

HMRC conduct thousands of enquiries into the tax affairs of freelancers every year. The freelancers concerned are often selected at random and, in the early stages, will be quite unaware that they are being investigated.

So it could happen to you. In fact, it could be happening to you right now.

One of the big issues, since the introduction of the IR35 rules in 2000, is the question of status. As far as you’re concerned, it’s a straightforward fact that you’re self-employed. HMRC may not see it as so straightforward. Indeed, they may not see it as a fact at all.

if you’ve been working regular hours at a client’s premises using equipment and facilities provided, HMRC may well decide that for the purposes of that contract, you were effectively employed, not self-employed. And that could have significant implications for your tax liability.

If you don’t have IR35 insurance, you’ll find yourself caught between a rock and a hard place. You either contest and face paying some very large accountancy fees and legal bills. Or you don’t contest and face having to pay what could be a very large tax bill.

However, if you do have IR35 insurance, you’ll be free to challenge the ruling knowing that you’re covered for all the professional costs involved.

Some might say it’s a no brainer. To find out more about IR35 insurance, call 0161 833 2100 or email info@freelanceinsure.co.uk .

Maintaining The Simple Life

We all want things to be easy - freelancers especially. The very antithesis of this noble ideal would seem to be the act of researching insurance policies. In many ways that’s true. In many other ways – such as when a freelancer falls foul of a career-crumbling lawsuit – it seems a simple enough task.

Choosing to take out professional indemnity insurance needn’t be head-scratchingly complicated – it just requires an understanding of the basics.

If a claim against them is made, professional indemnity insurance can offer freelancers protection in a variety of ways. One is if there is any negligence or breach of contract on the freelancer’s part. For example, a freelance programmer who produces poor code may ultimately be liable for his client’s IT system crashing.

Another form of protection is that for an unintentional infringement of intellectual property right which causes damage to the client. Professional indemnity insurance also covers freelancers for claims for liable or slander.

If the unfortunate programmer previously mentioned was to accidentally lose one of his client’s hard drives, this could also be brought to court. A PI insurance policy will help cover costs should a freelancer loses any data provided by the client.

As basic professional indemnity insurance just covers negligence, it is the cheapest option. More expensive policies may cover breach of duty, civil liability, and intellectual property disputes stemming from accidental infringement, and loss or damage of data or records.

As professional indemnity insurance does not offer freelancers coverage against the claims above the initial agreed amount, freelancers should make sure they are happy with the limit when they first take out the policy.

Those with an appropriate professional indemnity insurance policy automatically make their life simpler by nullifying the potentially destructive possibility of a future court case. Should a problem arise, professional indemnity insurance will cover both legal expenses and any further compensation payments owed.

Compared to the complications a lawsuit can involve, talking to an advisor about professional indemnity insurance is one of the simplest things a freelancer could ever do.

WHAT, WHY, WHEN AND WHERE: A Freelancers Guide To Professional Indemnity Insurance

What?  Professional indemnity insurance, often referred to as PI insurance, is designed to protect people who provide advice or services for a fee against any claim made against them by an aggrieved client alleging financial loss.

Typically, an indemnity insurance policy will protect you against claims of:

• Negligence
• Loss Of Documents Or Data
• Infringement Of Intellectual Property Rights
• Libel Or Slander
• Unintentional Breach Of Confidence
• Dishonesty

Professionals have it covered

The freelance community has grown dramatically in recent years as technology and communications have made remote and independent working a viable choice for many in the UK. Numbers are continually growing and there are now an estimated 1.4 million freelance consultants working everywhere from mainstream professions to the most highly specialized sectors.

What they all have in common is the need to be protected by adequate professional indemnity insurance. A photographer, for instance, would be well advised to take out a professional indemnity insurance policy if he or she were to undertake wedding photography. Unlike a landscape or portrait photographer, wedding photographs cannot be repeated.
If the bride and groom felt the pictures produced were substandard, or the photographer was unable to produce them because of a lost or stolen film, the photographer in question may find themselves on the receiving end of legal proceedings. If this were to happen, adequate professional indemnity insurance would cover the costs of defending and/or settling the claim.

Another key reason to have professional indemnity insurance is that freelancers can also be sued unfairly by a client who has no valid claim, but is merely dissatisfied. This would involve the freelancer in substantial legal costs and non-productive time.

From the legal standpoint, the position with regard to the “duty of care” is the same for any professional. If a freelancer offers a service in a specific area or sets themselves up as a specialist, they owe a “duty of care” to anybody who might reasonably rely upon their service and advice over and above that owed by the ordinary man in the street.

IT Contractor Insurance - 'Develop' A Secure Future

IT contractors are professionals involved in the business of selling their expertise to meet the IT requirements of both established and growing companies. They perform different contractual tasks (programming, design, project management etc) and are paid on successful delivery of these tasks. 

As someone who provides professional services and 'advice' IT contractors owe their clients  a legal 'duty of care'.  A 'duty of care' is a legal obligation imposed on an individual requiring that they adhere to a standard of reasonable care while performing any acts that could foreseeably harm others.  If the individual was to breach that duty of care by making a mistake or error (for example by producing bad code which subsequently delayed the implementation of a new IT system) the client can claim compensation for losses and expenses caused by the individuals negligence.

Which is why, in today's litigious society it has become necessary for IT Contractors to carry IT contractors insurance. Without insurance the IT contractor would have to personally pay legal costs if a negligence claim was made against them AND pay any compensation payments. We all know that legal fees can mount up quickly and any IT related compensation payment is not going to be cheap. By having IT contractors insurance you are removing the threat of this financial meltdown because the insurer will defend claims on your behalf and  meet any damages you may have to pay if it is found you have been negligent.

At FreelanceInsure we offer low cost IT contractor insurance from only £165 per annum. With over 10 years experience in insuring IT contractors our specialist policies provide comprehensive coverage - across all types of IT activities from system development and network support to project management and security consultancy. This means you don't need to worry if things go wrong at work...our policies (underwritten by Royal & Sun Alliance) will provide all the protection you will ever need.

To get a cheap IT contractor insurance quote please click here, select your preferred coverage and we can get you on cover in minutes. You can even access and print off your policy certificate online instantly. If you prefer to talk to someone first please call us on 0161 833 2100 or email info@freelanceinsure.co.uk and we'll do our best to answer your questions. 

Professional Indemnity Insurance (PI) - The best way to protect your business assets.

Whilst completing freelance projects, risks can never be totally eliminated so don't let an unexpected mistake or incident take you out of business! 
Remember, as a freelancer providing advice or services you are considered an 'expert' which means you owe your client a legal duty of care. If one day you provide an erroneous service you could be held legally responsible for damages caused to your client.  This  could leave you facing horrendous legal fee's and if held liable, responsible for paying compensation for the financial loss incurred.

But don't fret! For just a few pounds a day there is an insurance solution that can safeguard your personal and company assets if things go off beam. The solution is called professional indemnity insurance.

What is Professional Indemnity Insurance?

PI Insurance protects you if you have made a mistake or are found to have been negligent in performing a service under the terms of your contract. Professional indemnity insurance will pay the legal fees required for you to defend yourself aswell as cover the expenses for damages that you may be held liable for up to the policy limits. 

For years, professional indemnity insurance has been a mandatory requirement for other white collar professionals like accountants, solicitors. surveyors and doctors. Now it is becoming increasingly common for end user clients and staffing agencies to request a freelance consultant to have adequate cover in place before contracts are awarded.

At freelanceinsure our focus is to provide freelancers like you with the best protection, at the best prices. In partnership with Royal & Sun Alliance we have developed flexible, bespoke policies that protect over 100 freelance professions....from IT contractors and design engineers to legal consultants and photographers.  With over 20 years experience you can trust us to safeguard your business in these litigious times.

Cover is easy to obtain 24/7 at a time that suits you. It takes just a few minutes to apply, buy and download your policy documentation through our website. To get a cheap professional indemnity insurance quote please click here or call us on 0161 833 2100.

The financial consequences of mistakes can destroy years of effort and money you've invested in your business. Don't take the risk. Get a professional indemnity quote here today.