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Professional Indemnity Insurance

12 May 2024

Professional Indemnity Insurance

JCT Insurance Stand: B51

PII can be confused with General Liability Insurance (GLI). Both are important insurance policies for building professionals, but they have different purposes and cover different risks.

• PII is designed to protect against claims arising from professional negligence or errors and omissions, such as a mistake in advice given to a client or a design error in a project. It covers legal defence costs, compensation payments, and other expenses incurred as a result of a claim.

• GLI, on the other hand, is designed to protect businesses against third-party claims arising from bodily injury or property damage. For example, GLI would cover a claim made by a customer who slips and falls in a business's premises. GLI covers the cost of medical expenses, legal defence costs, and compensation payments resulting from a third-party claim.

There are several key benefits of buying Professional Indemnity Insurance, including:

• Financial protection: PII provides financial protection against legal action and compensation claims resulting from errors, omissions, or negligence in the provision of professional services. This can help the company avoid significant financial losses that could result from such claims.

• Reputation protection: Having PII in place sends a positive message to clients and customers, indicating that the company takes its professional responsibilities seriously and is committed to providing high-quality services. This can help to protect the company's reputation and enhance its credibility.

• Compliance: In some cases, professional bodies or trade associations may require their members to have PII coverage. Buying PII can help a company meet these requirements and ensure that it is operating in compliance with industry standards.

• Peace of mind: PII can provide peace of mind for the company and its employees, knowing that they are protected against the financial consequences of claims arising from their professional activities.

• Legal support: In the event of a claim, a PII policy can provide the company with access to legal support and advice to help defend the claim and negotiate a settlement.

Policy Cover

Professional indemnity insurance (PII) policies typically offer a range of cover options, including:

  • Errors and Omissions: This covers losses or damage that arise from errors or omissions (mistakes) made in the course of providing professional services. It may include compensation for any costs arising from a legal claim and the cost of defending such a claim.
  • Negligence: This covers the policyholder for losses or damage that arise from allegations of professional negligence, including compensation and the cost of defending a claim.
  • Defamation: This covers the policyholder for losses or damage that arise from allegations of defamation or libel. This may include compensation and the cost of defending a claim. Defamation is a legal term that refers to any false statement or communication that harms the reputation of an individual or business. 
  • Infringement of Intellectual Property:  This covers the policyholder for losses or damage that arise from allegations of infringing someone else's intellectual property rights. may include compensation and the cost of defending a claim for infringement of Intellectual Property.

Cover Limit

The limit of cover available under a PII policy will depend on the type of cover selected and the needs of the individual or company. The limit of cover should be sufficient to protect the policyholder against the cost of compensation and legal fees in the event of a claim. It's important for businesses to carefully consider their needs and the types of services they provide and to ensure that the limit of cover is adequate to protect their interests.

It's important to carefully review the policy wording and exclusions of a PII policy before purchasing to ensure that the policy meets the needs of the individual or company. It's also important to regularly review the policy to ensure that it remains adequate as the purpose or needs of the business change over time.

Get a Quotation

Expert Insurance Group can help Property professionals obtain Professional Indemnity cover. For a quotation, help or advice call JCT Insurance Expert on 01825 745 410 or email enquiries@eig.email

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