While professional indemnity insurance is vital for protecting your career, many businesses can get confused by their policies. In fact, a UK study found 34% of the participants couldn’t actually describe the insurance, while only 39% had purchased the cover. To help, we’ve tackled five of the most common misconceptions surrounding the topic:
1. It’s Not Applicable to My Profession
Professional indemnity insurance is necessary for almost every profession, from large businesses to beauticians to teachers/trainers. After all, any practice could potentially result in unhappy clients bringing about a lawsuit. Therefore, insurance is vital to protect against the consequences of any mishaps that could occur in the course of your work, such as allegations of negligence, breach of contract or other errors.
2. The Company Contracting Me Will Provide It
Many people may think that professional indemnity insurance is automatically provided by the company that has contacted them to do work with them. However, unless provision of professional indemnity insurance cover is specifically detailed in your contract, it is unlikely that you are covered. In this case, you should immediately look into obtaining your own insurance contract.
3. The Company Contracting Me Will Be The Liable Party
A surprising amount of sub-contractors believe any mishaps that occur are the contracting company/business’s liability, rather than their own. However, not only are injured parties capable of suing you directly for any mishaps that occur in the course of your work, the contracting company could also find you liable for performing your job incorrectly. Unfortunately, this means unless you have insurance, any financial reparations will be your sole responsibility.
4. My Public Liability Insurance Will Cover it.
No. The public liability policy provides indemnity to you in case you are found liable in causing physical damage to a third part. Professional indemnity insurance protects you while you provide services and advice for a fee.
5. My Business Insurance Will Cover it
Again, professional indemnity and business insurance each protect against very different circumstances. Business insurance safeguards against material damage to your premises, while offering public liability cover. However, this does not protect you against liability for services your business offers, even if you are self employed. Therefore, it’s essential to take out the correct cover before dealing with clients.