Professional indemnity insurance covers you for any legal costs or compensation claims that may arise. This is normally following an incident of negligence within the workplace.
It is needed if as a business you handle data, give advice, or have intellectual property of a client. It can also be needed if a customer has claimed you have provided poor services or advice to them.
It will also cover the business for numerous other things such as:
- Loss of documents/data
- Loss of goods/money that the business is responsible for
- Breaches of copyright
It is not always a legal requirement to have indemnity insurance however in some circumstances it is. In certain industries certain regulatory bodies do have this as a requirement. These are industries such as surveying and accountancy. However even if it isn’t a regulatory requirement it is normally a good idea to have the insurance in place if anything were to happen and a claim is made against you.
This kind of policy is used in order to offset any claims or fees to your insurer. This is due to the high costs that can occur as a result of any claim or legal action that can take place.