Published: 16/12/11
Professional indemnity cover – have you got it right?
Certain professions, particularly Solicitors, Accountants, Surveyors, IFA’s and Mortgage Brokers all have minimum requirements for Professional Indemnity insurance, but this should be considered simply as a base at which to work from. The advice is to work with us and consider closely your client base and the type of work that you do, beyond electing for the trading minimum.
Firstly, don’t confuse risk with severity; just because the risk is perceived to be relatively low any mistake that leads to a PI claim could have a catastrophic effect on your business.
For accountants the PI requirement is 2 ½ times fee income, but a claim for incorrect advice to a large client on say their VAT liability or corporation tax could easily wipe out PI limits. Similarly, Lawyers and particularly those practising in the conveyancing field or Surveyors who carry out Mortgage/Portfolio valuations could also fall foul of insufficient limits.
It’s also important to remember that with Sole Traders and Partnerships it is the individual not the firm that bears the ultimate cost, even extending to the loss of their own assets.
The cost of buying increased cover may be less expensive than you think; premium costs do not always rise in direct proportion and more importantly in the event of a claim having the correct sums insured will save your business.
For help with your Professional Indemnity Insurance call David Taylor 0845 371 1450 or email davidtaylor@flintinsurance.co.uk.
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