Professional indemnity (PI) insurance is key for those who offer a professional service, give advice or handle another firms’ data or intellectual property. The insurance covers you if your client suffers a financial loss due to work you have carried out for them.
Paying PI insurance is essential and one of the largest costs that organisations have to meet, but many do not realise that they can spread the cost over time with PI insurance loan. Read on for more information.
What is professional indemnity insurance?
If you make a mistake in a piece of work for a client that causes them financial or reputational loss, you may find yourself facing legal action and/or a claim for compensation. Professional indemnity insurance protects you and your business for the costs of compensating a client. Having PI insurance is not a legal requirement for all businesses, but it is a widely used form of protection for businesses in many sectors.
Who needs professional indemnity insurance?
Paying for professional indemnity insurance is popular choice for small businesses or self-employed people that provide professional services to other businesses or individuals. This might include tradespeople or contractors who are working in the premises of other businesses or in private homes, IT companies that manage another business’ website or computer network, businesses that provide advice to their clients, or even businesses that handle confidential information or copyrighted material for their clients.
If there is a risk that your professional service could cause damage to your clients should you make a mistake, or even if your business is subject to a cyberattack that compromises client data, PI insurance should be a top priority.
What does professional indemnity insurance cover?
Professional indemnity insurance typically covers:
- Professional negligence, i.e., if you give incorrect advice or make a mistake.
- Defamation, i.e., if you produce or support libellous statements about your client.
- Breach of confidence, i.e., if you share sensitive information without permission
- Breach of copyright, i.e., if you infringe on copyrights, trademarks or intellectual property
- Lost or damaged documents, i.e., if you lose or damage documents while they’re in your care
- Employee cover, i.e., if an employee causes a loss for your client.
Funding PI insurance with a loan
Paying PI insurance is essential and one of the largest costs that organisations have to meet. While PI insurance is an important form of protection for businesses, paying for PI insurance can be a significant cost to a business. This can impact a business’ cashflow, delaying their growth and affecting their operational capacity. There is an alternative, however, in the form of a PI insurance loan.
A PI insurance loan allows you to spread the cost of cover over a 12 month period. The interest on the loan and the repayments are fixed, making it easier to manage your budget and keep capital in the business. This leaves you with more money to invest elsewhere in the business or to keep in the bank to cover unexpected costs, bills, or downturns in revenue.
Interested in a PI insurance loan for your business?
We can help businesses to by obtaining the best funding options and facilities, quickly and efficiently, whilst ensuring your short-term goals and long-term ambitions are considered in your financial strategy.
If you are interested in spreading the cost of your PI insurance over time to retain capital and enable you to manage your budget more effectively, get in touch with us today.
We will assess your business’ individual circumstances and work with you to decide if a PI insurance loan or another finance solution would be the right choice.
Complete the form below to send us an enquiry.