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Professional Indemnity Insurance for Tradesman
Our Professional Indemnity Insurance protects anyone who provides designs, advice, or expertise as part of their professional service. Whether you’re a sole trader or own a limited company, Professional Indemnity Insurance will shield you from the costs of professional negligence claims, meaning you can relax and concentrate on the job at hand.
As much as you focus on delivering a fantastic service, we can all make mistakes on occasion, and it can sometimes be the simplest errors that end up being the most costly. This insurance protects you against these potentially significant costs, so you don’t have to worry about your business going under due to a claim.
Importance of having professional indemnity insurance for tradesman
Having Professional Indemnity Insurance is so important because, as a tradesperson who provides specialist advice and expertise, you never know when a job will turn sour. Sometimes, despite your best efforts, you get it wrong – and customers don’t tend to take too kindly when this happens, especially if they’re left out of pocket thanks to your guidance, design, advice or professional service. A compensation or damage claim usually follows – which will then be up to you to pay for. Even if the claimant isn’t awarded anything, the legal fees alone will be thousands of pounds – which you’ll be liable for. If there’s compensation or damages to pay on top, then you can be looking at a life-changing bill.
Professional Indemnity Insurance covers the costs you’ll incur if a customer alleges that you provided faulty advice and they have suffered a financial loss as a consequence.
With Professional Indemnity Insurance, your insurer will foot the bill for everything from legal costs to a settlement pay out (up to your chosen level of indemnity u to £2m).
Is Professional Indemnity Insurance required by law?
Unlike with Employer’s Liability Insurance, Professional Indemnity Insurance isn’t something the law requires. However, as a tradesperson, it’s extremely handy to have Professional Indemnity Insurance in order to cover your back in those situations where a customer has a negative outcome as a result of a professional service you’ve delivered.
Sometimes, having Professional Indemnity Insurance will be a condition of a client’s contract with a consultant or contractor – so in some cases, you won’t even be hired if you don’t have it.
Rhino Trade Insurance’s Professional Indemnity Insurance for tradesmen and women is the perfect add-on to your existing tradesman insurance policy package.
Types of risks covered by professional indemnity insurance for tradesmen
Anything from an incorrect measurement leading to a faulty fitting, advice that leads to the collapse of a weight-bearing wall, to the mishandling of personal data would come under the umbrella of professional negligence and may be covered under a Professional Indemnity policy.
The friendly, expert Rhino team are on hand to answer any questions you may have about Professional Indemnity Insurance. Why not give them a call today on 0116 243 7904 to talk through any queries you might have?
DO I need Professional Indemnity Insurance?
It’s sensible to take out Professional Indemnity Insurance if you provide:
- Consultancy services
- Professional advice
- Designs or plans
- Data or sensitive information handling
PROFESSIONAL INDEMNITY INSURANCE (SUMMARY)
- Limits of indemnity available up to £2M
- Competitive rates for most trades including electricians and plumbers
- Option to cover multiple trades
- Instant cover with documents immediately
- UK telephone support
- Annual and monthly payment options
WHAT DOES PROFESSIONAL INDEMNITY INSURANCE COVER?
Your Professional Indemnity Insurance will cover:
- Your legal defence – costs incurred defending you in court against claims of professional negligence.
- Compensation – Any sum awarded to cover the cost of rectification of faulty work or any additional compensation awarded by the court.
At Rhino, we offer a range of limits starting from £100K and up to £2M. The Policy Retroactive date (see What does the Policy exclude?) will fall in line with the date you first purchased Professional Indemnity Insurance provided insurance has been held continuously since that date (even if it has been provided by different insurers). If it is the first time you have purchased Professional Indemnity insurance, the retroactive date will be the same as the Policy start date.
WHO NEEDS PROFESSIONAL INDEMNITY INSURANCE?
Any tradesperson that has a design element to their service or provides professional advice. Sometimes holding this insurance will be made a condition of a contract by a contractor or customer, so you’d be losing out on work if you don’t have it.
Examples of Scenarios Where Professional Indemnity Insurance Would Come In Handy
Rhino can provide cover for most trades, with the exception of some areas that are deemed too high-risk by the insurer. We have listed a few examples of instances where professional indemnity insurance would be needed below:
- An electrician installed emergency lighting that did not comply with the relevant building regulations, the lighting needed to be removed and new lighting re-installed.
- An electrician designed and installed a backup generator in a shop, the generator failed, causing damage to frozen foods and impacting the shop’s ability to trade.
- An engineer designed a heating system that was alleged to be inefficient and faulty due to a design error that required rectification. The decision was upheld in court, and there were significant rectification costs.
WHAT DOES THE POLICY EXCLUDE?
Coverage is broad and it is rare for claims to be excluded, although it is important that cover is in place at the point at which the complaint or issue first arises and that the work undertaken that causes the claim was undertaken after the ‘retroactive date’ of the Policy. The retroactive date will normally be the date that Professional Indemnity insurance was first purchased, provided that it has been held continuously since that date (even if it has been provided by different insurers).
What add-on policies can I combine with my Professional Indemnity cover?
As a self-employed tradesperson, there are a few policies that you’d benefit from having in place alongside your Professional Indemnity cover.
These include:
Public Liability Insurance - This really is an essential policy. If you come into contact with your customers or the general public (and what tradesperson doesn’t?!) then you’re going to need Public Liability cover. This protects you in case of accident or injury to someone around you while you’re on the job – it also covers property damage.
Employer’s Liability Insurance - Speaking of essential, if you employ anyone in any capacity, then the law requires you to have Employer’s Liability Insurance. You may know that you’ll get heavy fines from the government if you need it but don’t have it, so this is another policy not to skimp on.
Income Protection Insurance - As a self-employed worker, you have no protection in place should you fall ill, or become injured and unable to work. Income Protection Insurance is another must-have for any tradesperson, as it will give you the financial means to keep your home and business ticking over while you recover. This is usually in the form of a monthly pay-out – a total lifesaver while you’re laid up unable to earn.
Personal Accident Insurance - On the subject of unfortunate events, an accident which leaves you unable to work for a period of time can be devastating to a self-employed contractor. Personal Accident Insurance is a smart choice to add onto your Professional Indemnity cover. PA insurance will give you a lump sum to help you cope financially during this difficult time.
Many tradespeople are breadwinners, so this really would save the day if something unfortunate were to happen.
Tools in Transit cover - Given the rising rates of tool theft here in the UK, tools insurance is another important policy that can be added onto your Professional Indemnity cover (or any other tradesperson policy you choose). Knowing that your tools, if stolen, can be replaced quickly and without you having to bear any cost (apart from the policy excess), offers valuable peace of mind to tradespeople
Luckily, Rhino can provide you with all of the above policies and more, each of which can be included as an add-on with any policy you take out with us.
Here at Rhino, we have a whole range of policies hand-picked especially for tradespeople just like you. We really understand what it’s like to work in a trade and only offer the policies that tradespeople really need, without any added fluff.
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Professional Indemnity Insurance for Tradesman FAQs
As a tradesperson, you know that your completed work is your best advertisement for your services, and that a happy customer will likely shout about a job well done.
But in any business, there will always be times when a customer isn’t happy. This might be be due to negligence on your part, an honest mistake or advice given in good faith that turned out to be pretty terrible.
Whether your customer is withholding payment, making complaints, or even threatening to sue, you’ll be grateful for the safety net that Professional Indemnity Insurance provides if and when that time comes.
This is because legal claims against your business can cost a lot of money. No small business wants to find themselves paying legal fees and shelling out large sums for compensation thanks to a simple professional blunder, but this is exactly what would happen if you found yourself the subject of a claim without Professional Indemnity Insurance in place.
There is no way of knowing how much it would cost to defend a Professional Indemnity claim, so this isn’t something you can budget for.
But in any business, there will always be times when a customer isn’t happy. This might be be due to negligence on your part, an honest mistake or advice given in good faith that turned out to be pretty terrible.
Whether your customer is withholding payment, making complaints, or even threatening to sue, you’ll be grateful for the safety net that Professional Indemnity Insurance provides if and when that time comes.
This is because legal claims against your business can cost a lot of money. No small business wants to find themselves paying legal fees and shelling out large sums for compensation thanks to a simple professional blunder, but this is exactly what would happen if you found yourself the subject of a claim without Professional Indemnity Insurance in place.
There is no way of knowing how much it would cost to defend a Professional Indemnity claim, so this isn’t something you can budget for.
There’s no black-and-white answer to this, so the best thing to do is consider what type of business you’re running and see if Professional Indemnity Insurance would help you if you made a blunder.
If you provide:
Guidance
Consultancy
Handle client information
Give advice or tips…
…then you’re likely to need Professional Indemnity Insurance. Think of it this way – if a client follows your advice or plans, or uses something you designed which turns out to be defective, faulty or just plain wrong – and they lose money as a result – then you need Professional Indemnity Insurance.
In terms of which tradespeople need it; anyone from engineers, electricians, architects and surveyors will benefit, as well as any other trade where the above elements are a factor.
If you provide:
Guidance
Consultancy
Handle client information
Give advice or tips…
…then you’re likely to need Professional Indemnity Insurance. Think of it this way – if a client follows your advice or plans, or uses something you designed which turns out to be defective, faulty or just plain wrong – and they lose money as a result – then you need Professional Indemnity Insurance.
In terms of which tradespeople need it; anyone from engineers, electricians, architects and surveyors will benefit, as well as any other trade where the above elements are a factor.
At Rhino, we don’t want our customers to have to pay a penny out of their own pocket for Professional Indemnity claims, (apart from the small excess you’ll find on all insurance policies) so our cover ranges from £100K to £2M.
As a general rule, the larger the business, and the broader its scope, the more Professional Indemnity Insurance you’ll need. For example, if you have several employees and your operations include giving direct consultancy services, or designing plans, then your level of indemnity cover should be higher than someone without any staff and who doesn’t give direct advice/ consultancy.
Don’t worry if you don’t know how much is right for you. Our friendly team of trade insurance experts are here to help you with that.
As a general rule, the larger the business, and the broader its scope, the more Professional Indemnity Insurance you’ll need. For example, if you have several employees and your operations include giving direct consultancy services, or designing plans, then your level of indemnity cover should be higher than someone without any staff and who doesn’t give direct advice/ consultancy.
Don’t worry if you don’t know how much is right for you. Our friendly team of trade insurance experts are here to help you with that.
The general rule for any insurance claim is – let your insurer know as soon as possible if you need to make a claim.
Our Policy Wording states that you must let us know within 28 days of a claim or suspected claim, but really, it’s a case of the sooner the better. When it comes to Professional Indemnity Insurance, we would suggest you notify us as soon as you have an unhappy client. You don’t need to have received a formal claim yet to keep us in the loop.
Remember, your Professional Indemnity cover must be in place when the complaint or issue first arises, and it should have also been in place when you carried out the faulty work.
You can let us know of a claim or circumstances which may lead to a claim in 3 ways – by first class post, email or by telephone. Full details of how to notify us are found in the Policy Wording document available on our website – you’ll also get your own copy when you sign up for a policy with us.
Our Policy Wording states that you must let us know within 28 days of a claim or suspected claim, but really, it’s a case of the sooner the better. When it comes to Professional Indemnity Insurance, we would suggest you notify us as soon as you have an unhappy client. You don’t need to have received a formal claim yet to keep us in the loop.
Remember, your Professional Indemnity cover must be in place when the complaint or issue first arises, and it should have also been in place when you carried out the faulty work.
You can let us know of a claim or circumstances which may lead to a claim in 3 ways – by first class post, email or by telephone. Full details of how to notify us are found in the Policy Wording document available on our website – you’ll also get your own copy when you sign up for a policy with us.
