Why Professional Indemnity insurance?

In an increasingly litigious society, more and more individuals and businesses are looking for accountability for the adverse consequences they experience as a result of services delivered to them. As this trend continues, there is a need for professionals, who give advice and provide a service, to ensure they have adequate insurance to protect against a claim.

Best business practice is leading the way towards professionals realising the value of having Professional Indemnity insurance. Many firms now only employ the services of professionals who carry Professional Indemnity insurance.

Contrary to popular belief, most standard public liability policies do not cover the liability for advisers causing financial losses as a result of an error or omission or bad advice.

Case studies

Below are some examples of the need for Professional Indemnity insurance:

Tax Adviser

A tax adviser had prepared a client’s tax returns for a number of years but failed to include in the returns relevant details of taxable income provided to him by the client. The client was liable to pay the Inland Revenue interest plus penalties arising from late payment of the undeclared income. The client in return recovered these sums from the tax adviser.

Exhibition Organiser

An exhibition organiser was responsible for booking a venue for a specialist event but forgot to confirm the booking. As a result, the venue was not available for the client and the event had to be cancelled. Consequently, the exhibition organiser was liable to the client for cancellation fees it had to pay to speakers and caterers as well as printed literature that could not be reused.