Professional indemnity claims occur in instances of professional negligence and/or breach of contract. If a client of yours suffers financial loss as a result of alleged neglect, error or omission on your part, they will not hesitate to pursue a claim. PI claims cause significant damage to your professional reputation and often result in hefty fines.
The list of businesses that require professional indemnity cover is growing; however, some professions are more at risk of professional indemnity claims than others.
1. Technology Companies
With the growing requirements for handling customer data, technology firms are becoming more exposed to professional indemnity claims. The introduction of the General Data Protection Regulation (GPDR) this May can expose tech companies to fines of up to £20m (or 4% of global turnover) for data breaches.
Claims made against tech firms often result from fast-growing businesses taking on too much work, resulting in missed deadlines or not completing work to a satisfactory standard. Other examples of PI claims include the loss or mishandling of client documents, overspending or the overrunning of projects, and unintentional or intentional breaches of contract.
2. Business Consultants
Business consultants are exposed to numerous situations that lead to professional indemnity claims. Providing incorrect advice or making mistakes is likely to be seen as a failure to meet the industry standard of work, and lead to claims of professional negligence; as will missing deadlines or infringing on copyright.
For example, if a consultant undertakes a project to develop a strategy to improve profits for Company X, but fails to deliver the plan by agreed timeline. Company X sues then for loss of fees. Consultants who handle client information will also affected by the introduction GDPR.
The precise nature of the work carried out by accountants means that any mistakes, errors or miscalculations can have serious financial repercussions for their clients, which will almost certainly lead to a professional indemnity claim. As with consultants, any professional advice accountants provide that turns out to be inaccurate could also result in a claim.
Aside from making mistakes, accountants could also face claims if they lose any financial documents or data or misuse that information. For example, if an accountant unintentionally shares confidential information about client’s finances resulting in financial loss. The client then sues for compensation.
Architects are exposed to a high risk of professional indemnity claims, as simple mistakes in building plans can have enormous and costly repercussions. All surveys, reports, specifications and schematics could give rise to claims of professional negligence, if they directly or indirectly cause a financial loss.
For example, if an architect makes a mistake in the design plan which results in poor construction of building for client. The client then sues for costs of rectifying the flawed extension. Working with contractors and other professionals also opens architects up to claims arising from mistakes those parties make, should it be determined that inadequate supervision was carried out.
5. Media Professionals
The media industry is undergoing a significant change and are being subjected to more and more regulation. People who work in marketing, advertising, media and communications are increasingly exposed to claims for simple errors, like booking the wrong ad space or making spelling mistakes.
For example, if a marketing agency omits a digit from a client’s phone number and forget to include their web address in a printed advert, the client is likely to sue for costs of reprinting advert and marketing fees. This industry is also particularly at risk of legal action for copyright infringement, as well as company defamation, because the work carried out has a direct impact on public perceptions of a brand or organisation.
Protect your Career
Mistakes cannot always be prevented, if you’re not properly protected, indemnity claims resulting from these mistakes can be both financially and professionally devastating. If you work in any of the professions we have covered above, you can avoid the damaging effects of PI claims with professional indemnity insurance cover. Secure your career with Professional Indemnity Insurance from OBF.
To find out more and get a quote, please visit the Professional Indemnity page on our website. Alternatively, to discuss your own specific requirements in more detail, call us on +353 (0)1 660 1033 today.