WHAT IS PROFESSIONAL INDEMNITY INSURANCE?

Professional Indemnity Insurance protects businesses and individuals who provide designs, advice or expertise as part of their professional service. The insurance covers costs incurred if a customer alleges that you provided a faulty professional service and they have suffered a financial loss as a consequence.

Many self-employed professionals need this cover, including those working in various trades. If you’re a tradesperson, having this insurance will protect you from being hit with huge financial liabilities for a simple professional blunder.

Rhino are the UK’s trade insurance experts, and Professional Indemnity Insurance is one of our most popular policies. 

We all have days when we screw up. Don’t let them come back to bite you – protect yourself with Professional Indemnity Insurance from Rhino today!

 

WHY DO I NEED PROFESSIONAL INDEMNITY INSURANCE?

You need it because professional mistakes are not uncommon – but when they happen, they can cost a fortune. 

Professional Indemnity Insurance will protect you against being taken to court by clients who allege that you have made a professional error, caused a data breach, or for libel, an omission or any situation where you have neglected your professional duties and caused the client a loss.

It’s a good idea for all tradespeople who offer professional advice, designs or any type of advisory services to protect themselves with Professional Indemnity Insurance. This is because if you’re sued by a client for providing an inadequate service, you will be liable to pay some huge costs that you may be unable to meet. These costs could sink your business, so this is not a matter to be taken lightly.

Policyholders of Rhino’s Professional Indemnity Insurance will benefit from their legal costs covered in the event of a claim made against them, and any settlement sum borne by the insurer, offering priceless peace of mind for any busy trades professional. 

 

WHAT OCCUPATIONS ARE COVERED BY A PROFESSIONAL INDEMNITY INSURANCE POLICY?

If you make a living by giving advice, helping clients to make plans, or if you handle sensitive client data in your trade job, you are at risk of coming up against a professional negligence claim at some point. 

Here are just a few of the types of professions who would require Professional Indemnity Insurance:

• Building contractors
• Architects
• Estate agents
• Surveyors
• Landscape gardeners
• Engineers 
• Audio-visual contractors 
• Inspectors 

Even if you’re not in the business of selling your advice, you should still consider adding Professional Indemnity Insurance to your trade insurance arsenal. Any profession which simply holds sensitive client data should consider Professional Indemnity Insurance, as a data breach (even forwarding an email including a client’s personal information would count) can easily put your business in hot water and lead to a claim. 

 

CAN I GET SHORT-TERM PROFESSIONAL INDEMNITY INSURANCE COVER? 

If you make your living from offering professional services, advice, plans or consultancy, you’d want to be covered 365 days a year by your Professional Indemnity Policy. But if you’re taking out cover for a specific job only, you might wonder if you can take out a short-term policy to cover just this one job.

It’s not as straightforward as that, unfortunately. This is because if you cancel your Professional Indemnity cover soon after finishing your job, then you may not be covered if the work you did ends up leading to a claim in the future. The policy will only apply to the job as long as the policy is live.

Therefore, if you want to be protected, you need to take out long-term protection. This will make sure you’re covered for past work, and any jobs you do in the future, too.

 

WHAT DOES THE TERM ‘RETROACTIVE DATE’ MEAN? 

‘Retroactive date’ means the date from which you are covered by your policy, so long as the work is carried out after this date. 

For example, if you took out a Professional Indemnity Insurance policy in June and designed an extension for a client in July of the same year, you’d be covered by your policy should the extension collapse in August and the client make a claim against you. If a different client brings a claim against you for work completed the previous January, you wouldn’t be covered for that despite you now having Professional Indemnity Insurance in place. 

 

WHAT DOES A PROFESSIONAL INDEMNITY INSURANCE POLICY INSURE AGAINST?

Professional Indemnity Insurance covers a range of different instances which can affect self-employed individuals offering professional and consultancy services. 

These include:

• Omissions and errors in your work
• Poor advice leading to financial loss
• Breach of contract
• Breaching copyright permissions
• Sharing confidential information without consent
• Mishandling or losing client’s documents or data
• Making false statements leading to reputational damage
• Missing deadlines and not meeting deliverables

 

 WHEN IS PROFESSIONAL INDEMNITY INSURANCE REQUIRED? 

If you’re running a self-employed business, it makes good sense to be covered by Professional Indemnity Insurance for your entire career. This way, you don’t need to worry about a job going wrong, or a piece of advice you gave coming back to bite you. 

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.

Professional negligence claims and legal action against tradespeople is nothing new. If something goes wrong following a job, it’s only natural that people seek compensation for the damage done and any financial or reputational loss they have suffered. The liability for this always falls to the tradesperson, which is why insuring yourself against these costs is so important.

 

IS PROFESSIONAL INDEMNITY INSURANCE A LEGAL REQUIREMENT?

It’s not a legal requirement in the UK to have Professional Indemnity Insurance in place. However, you should know that if you do become the subject of a professional negligence claim then you will be liable to pay the costs involved with the claim – even if the claim against you is unsuccessful. 

Having Professional Indemnity Insurance is written as a condition into some contracts, so be sure to check each contract carefully before you sign on the dotted line.  

 

 HOW DO I GET A PROFESSIONAL INDEMNITY INSURANCE POLICY? 

It’s simple with Rhino. Simply head to our quick quote engine, enter a few details and get your quote in a matter of seconds. Once you’re happy to proceed, you can buy your policy online in just a few clicks. You’ll be covered straightaway, and you’ll receive your policy documentation in your inbox within a few minutes. 

And if you need to sort the rest of your trade insurance while you’re at it, you’re in the right hands. Adding on other useful policies is easy with Rhino. Get your Public Liability Insurance, Employer’s Liability Insurance, Tools Insurance, Personal Accident Insurance, Legal Expenses Insurance and more direct from Rhino in a fuss-free, personalised bundle.

 

WHAT DOES THE POLICY EXCLUDE?

Coverage of Professional Indemnity Insurance 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).

 

WHO NEEDS PROFESSIONAL INDEMNITY INSURANCE?

Rhino offers Professional Indemnity Insurance at great rates to many different trades, from electricians to plumbers. 

Any tradesperson that has a design element to their service or provides professional advice should consider Professional Indemnity Insurance. 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.

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 PROFESSIONAL INDEMNITY INSURANCE COVER?

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.

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.

 

WHAT COVER LIMITS SHOULD I CHOOSE?

The level of Professional Indemnity cover you need depends on your business. If you’re working in a trade where clients rely on your expertise and professional advice day in, day out, you’ll probably want to cover yourself for every eventuality with a higher limit.

There are other things to take into account, too, such as your annual turnover and the number of employees you have (if any). It’s worth remembering that your premium amount will be higher if you choose a higher cover limit, but you also risk leaving yourself underinsured by choosing a limit that’s too low.

Rhino offers a range of limits starting from £100K and up to £2M. 

Speak to a member of Rhino’s expert team to learn more about the cover limit that might be right for you.

 

HOW MUCH WILL IT COST?

The cost of the insurance will depend on your income, number of employees or turnover level, but premiums start at less than £250 for a year’s cover and the cost can be spread monthly with Rhino at no extra cost to you.

You can rest assured that Rhino provides great value insurance, which is not only affordable but also pays out when it’s needed. 

Don’t keep pondering how much it will cost, as Rhino can give your business an instant online quote today!

 

IS IT A LEGAL REQUIREMENT?

Professional indemnity Cover is not a legal requirement. 

However, the protection this insurance affords is invaluable to most businesses, as it ensures that you are not bankrupted by a professional negligence claim. Also, many businesses, customers or contractors will make it a condition of their contract, so you’ll be more employable once you have it.

 

WHO IS THE INSURER?

Rhino's Professional Indemnity Insurance is provided by MGAM Limited on behalf of Convex Insurance UK Limited who are a specialist insurance and re-insurance provider. Convex has almost $2billion of market capitalisation and is rated A- (Excellent) by A.M. Best, a world-renowned global rating agency.