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Why PI? Professional Indemnity insurance explained
One of the benefits of working through an umbrella company is that you are typically covered under various types of business insurance, which gives contractors massive peace of mind without the financial outlay of big premiums.
When you work through Liquid Friday, you are automatically covered for Employers Liability, Public Liability, Professional Indemnity and Personal Accident.
As a contractor taking on a job or assignment, there will usually be a contractual obligation for these types of insurance. Having it already in place not only puts you at an advantage over other candidates, it also means there’s less paperwork to sort out at the start of an assignment.
Today it’s PI – Professional Indemnity insurance – that we’re going to have a look at in more detail.
Professional Indemnity – who needs it and why
PI insurance covers the cost of mistakes made when providing professional services. In the simplest terms, it is there to protect a professional person or business against claims for negligence if they make a mistake, or give incorrect advice.
Most professional bodies and institutes require their members to have Professional Indemnity insurance as a condition of membership. However, even in unregulated industries, where a claim for negligence could arise, it is advisable to have PI cover in place. Besides, as mentioned above, it is often a condition of contract.
Of course, anyone can make a mistake, but while some errors are minor with no real cost or consequence, others are much more serious.
Depending on the policy, PI covers negligence, errors and omissions, breach of duty and civil liability. It may also cover things like loss of documents, loss of data, breaches of intellectual property, defamation and libel.
PI also covers the other liabilities that arise from being sued, including eye-watering legal bills.
PI in construction
While PI insurance is used in many industries, the risks inherent in the construction industry make it absolutely vital.
In recent years, problems obtaining PI insurance have been rife in the construction industry, with costs soaring, if cover can be obtained at all.
This has largely been the insurance industry’s response to the huge negligence claims arising from the Grenfell Tower tragedy in 2017. One large construction firm specialising in facades and drywall, reported a staggering 1571% hike in their PI premiums between 2017 and 2021.*
Liquid Friday’s contractor PI cover
Whatever your industry, if your contract requires you to have Professional Indemnity insurance, with Liquid Friday you are covered, with a level of indemnity of £5,000,000.
Whether you are a PAYE umbrella employee or self-employed, either under CIS or outside of construction, this cover is included as standard – one less thing to worry about!