Professional Indemnity Insurance

Flonglee

Hi All! I'm starting my own bookkeeping business and I need to get PI insurance. Has anyone got any advice on what to look for? Level of cover? who to use/not use? Thanks

Pennywise

Level and scope of cover will be set by your professional body, so best to check with them. They should also have either a preferred insurer or a list of suitable providers. Some professional bodies include PI insurance as part of their annual subscription, or as a relatively cheap add-on.

InsideInsurance

PI is written on a claims made basis, ie its the policy that is in force at the date of the claim that you claim against not the policy that was in force at the time of the incident that resulted in the claim occurring (which is how Motor or Home works)

This means two things, other than for year 1 you need to ensure that the policy has retro cover, ie for incidents that happened before the policy, almost all do but have seen a few budget policies that dont

Secondly it means even after you stop working it may be prudent to continue buying the insurance, particularly if you are a sole trader, as you could be sued several years down the line (law of limitations is 6 years)

Level of cover depends on what you are doing/ size of your clients etc. If you messed up a big companies books and it potentially could cost them £2m then you need a high limit. If however you only deal with vSMEs who all have turnovers under £50k then clearly a much lower limit would be adequate.


Many insurers write many different policies depending on distribution channel etc so its hard to say go with X or avoid Y. Hiscox has a good reputation in all classes of insurance and doesnt tend to go into the bargain basement space. I saw one policy from RSA that had so many loopholes you could drive a bus sideways through it but it was dirt cheap. I have seen them quote on other places where I suspect it was a better product.


There are some associations that do give PI cover, in most cases it should be suitable but have seen some general associations where the policy doesnt cover you if your work is in relation to certain areas (eg financial services or M&A) and so always worth checking the policy and not assuming its suitable.