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Freelancers, contractors and small business owners are only human. 99% of the time you’re probably on the ball – meeting your clients’ needs and never messing up. But when something does go wrong, and the finger ends up being pointed at you – this is where Professional indemnity insurance can save the day.
Professional Indemnity insurance (sometimes referred to as PI insurance) offers protection for your business against a customer suing you for a financial loss that they believe was caused through your negligent advice and/or services.
While in reality most claims are settled before they get to court, the legal costs involved can build up very rapidly – even in quite minor disputes. Your professional indemnity insurance provider will defend claims on your behalf, covering your legal fees and meeting any damages you have to pay if you are found liable.
Here are a couple of recent claim examples when freelancers, contractors and small businesses were thankful to have had professional indemnity insurance in place:
Professional indemnity insurance should be considered by any self-employed worker who is providing design, advice or specifications during the course of their role.
While it isn’t a contractual requirement in every instance, most clients will specify that it’s required in their contracts before working with you.
In the vast majority of cases, holding £1,000,000 of professional indemnity insurance will meet the contractual requirements of your client and be sufficient to cover the potential exposure of the work you are completing. However, it is important to check the terms of your contract and consider the size of a claim that could be made against you if something were to go wrong – especially if you are working highly specialised roles and industries or working on high-value projects.
If you work through a personal service company and you’re concerned about the impact of IR35 on your business then having the right business insurance in place can help show that you are genuinely self-employed not a disguised employee and therefore should be outside IR35.
Some other articles you might find useful:
Yes! If you’re a freelancer, contractor, or small business owner, Crunch can help you find business insurance tailored to you through our partner Kingsbridge, Crunch clients or Crunch Chorus members even get a 10% discount on their premiums.
In this webinar, Andy Robinson (Head of Business Development at Kingsbridge Contractor Insurance) joins us to discuss why you need small business insurance, what types of insurance you should consider, what can happen when you aren’t insured, and some examples of typical insurance claims.