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Freelancers and contractors are only human. 99.9% of the time you’re probably on the ball meeting the needs of a client and never messing up. Or at least not majorly.
But, what happens when something does go wrong, and the finger ends up being pointed at you? This is where Professional Indemnity insurance comes into play.
There are an infinite number of ways in which mistakes can happen. After all, a whole genre of film is based around pratfalls and crossed wires.
Here are a few examples relevant to the contractor community:
Freshly boiled coffee spilt over a row of expensive laptops
Accidentally bringing down a clients website or corrupting a system
Imparting advice that turns out to be against the interests of a company
Any action that is deemed liable for a clients loss of earnings.
So, how does PI insurance help?
PI will protect your business against claims for loss or damage by a client or third party.
PI will also cover your legal fees. While in reality most claims are settled before they get to court, the legal costs involved, in even quite minor disputes, can build up very rapidly.
* Your insurer will defend claims on your behalf. And meet any damages you may have to pay.
Is PI insurance for you?
PI insurance is recommended to any freelancer or contractor who works on a project where one error can have major consequences for the client. Ask yourself: how likely is it that I could cause a significant disruption to the clients business?
There are some simple steps you can take to ensure you are well prepared for the event of an untimely mistake, or the likelihood of being unfairly accused of liability for a client’s losses. First off, make sure you keep a record of all documentation and ensure that the terms of your contract are clear. Also, keep a detailed record of the work that you do.
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Professional Indemnity insurance should be considered by any self-employed worker who is providing design, advice or specifications.