Vital cover for your business
You should consider taking out professional indemnity (PI) insurance if your business gives advice or offers a professional service to other businesses. It provides cover if you are negligent and make a mistake which causes a client to suffer financial loss.
We are all familiar with the traditional professions such as accountants, surveyors, engineers, solicitors and architects. However for liability purposes, a “professional” is essentially any person who offers specialist advice or service, and it is not confined to these traditional categories. As such, anyone who holds themselves out as having a more than ordinary degree of knowledge in a particular area and gives advice to another party, may be liable to that party if they rely on that advice and it causes them to suffer a financial loss. A fee for the advice does not need to be received for the liability to exist.
The professional person must exercise the degree of skill and care which is reasonably expected of a competent practitioner in that profession at that time. The legal formulation of negligence is a failure to exercise this reasonable skill and care.
In the current economic climate clients will not hesitate to pursue a claim if they feel that they have received poor advice or service. The need for professional indemnity insurance has never been greater.