Professional Indemnity (PI) is generally the most talked about but probably the least understood category of freelancer insurance.
One thing that you can count on is that a mistake in your work may prove to be very costly. As a freelancer you do carry a responsibility to your clients and they do have legal recourse against you and your company for any financial loss. Although the chance of a successful claim against you is small, the chance of a client making a claim is much higher. If for no other reason, having the protection of Professional Indemnity will at least pay for the expensive legal costs of defending such a claim. Of course if a claim against you should prove to be successful, the damages awarded against you could potentially be crippling. And as a director of your own company, the risk is that damages can be awarded against you personally as well as your company.
When “shopping” for quotes, always be sure to compare like for like. Important features to watch out for include:
- Ensure that the scheme covers both direct and agency contracts.
- Ensure that retroactive cover is offered – thus covering any work or decisions that you have made in the recent past.
- Check out the excess in the event of a claim – some can be very high.
- Ensure that the policy covers “sub-contracted” work.
- Ensure that all Directors, Officers and Employees of the Company are covered by the policy.
Although this insurance may be purchased independent of Public Liability & Employers Liability Insurance, we do recommend that you consider both classes of insurance as they are equally important to your business.
As an Accountancy Service client JSA is able to extend our existing Policy to include your Company at no additional cost.