How much does professional indemnity insurance cost?
How much your PI policy costs depends on what you do and how much of it you do.
Some professions are ‘riskier’ than others. For example, the stakes can be high if an architect or engineer gets things wrong, and the numbers involved in a claim can be large.
Also, a business that does, erm, a lot of business with a lot of clients is more likely to be sued than one that doesn’t - simply by the laws of probability.
Where professional indemnity insurance is worth its weight in gold is in helping to protect any type of business from the potentially crippling financial repercussions of a claim.
And the good news is, prices start from around €6.51 a month for €100,000 worth of cover. When you get a professional indemnity insurance quote you’ll be able to select your occupation from among the hundreds we cover.
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How much professional indemnity insurance do I need?
How much professional indemnity insurance you need depends on what you do and on what scale. That said, working out a precise amount isn’t an exact science.
As a rule of thumb, think about the worst mistake you could make, how much it could cost to put right, how much compensation you might have to pay your client and what the legal costs might be. Big numbers, right?
Also remember that if a project goes horribly wrong because of something you did, a client may sue you for the entire cost of the failure, not just your part in it.
Buying as much professional indemnity as you can afford is a good place to start. You can never have too much.
Other things to consider are that some professional associations require members to have professional indemnity cover at a minimum level. Plus, clients may make having a certain amount of professional indemnity a condition of their contracts.
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Why do I need professional indemnity insurance?
Because Murphy’s law says that if something can go wrong it will. Not forgetting that none of us are perfect, no matter how good we think we are at what we do. We can all make mistakes.
Others can make mistakes on our behalf too. Such as a contractor or supplier who doesn’t hold up their end of the bargain. Only the buck stops with you.
A mistake that costs a client money usually means a claim for compensation. Unfortunately, that’s when lawyers get involved and costs start to escalate.
By picking up the tab for your defence and covering any payouts, professional indemnity insurance takes care of everything. It means you’ll still have a business left to run once all the drama’s over.
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What does professional indemnity insurance cover?
Generally, but depending on the exact wording of your policy, it pays to defend you against claims of:
- Negligence or breach of duty of care to your client – making a mistake or providing bad service.
- Infringing intellectual property rights – such as trademarks and copyright.
- Defamation and libel – writing or saying the wrong thing.
- Breach of confidence – sharing information you weren’t meant to.
- Losing data – either paper or digital.
- Dishonesty – by your employees or subcontractors.
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