Is Professional Indemnity Insurance Included in Tradesman Insurance?

As a tradesman or contractor, you may be considering professional indemnity insurance – but it’s important to know all the facts before you purchase this kind of cover.

Professional indemnity insurance will cover you for the advice and design that you provide. In essence, it covers what you say, not what you do.

In the event you give bad advice, or provide an unsuitable design, your professional indemnity insurance will handle the claim.

In this article, we’ll discuss the following questions:

• What is professional indemnity insurance?
• Do I need professional indemnity insurance?
• How do I get professional indemnity insurance?

This kind of cover is not expensive, but it’s a good idea to have if you find yourself giving designs and advice to clients on a regular basis.

What is professional indemnity insurance?

Professional indemnity insurance covers your legal liability for any advice and design services that you provide.

Public liability is there to cover your actions (i.e., what you do) whereas a professional indemnity policy covers your advice (i.e., what you say). Professional Indemnity insurance protects you if you provide advice, consults, design services.

Tradesman’s insurance does not cover professional indemnity as standard, but it’s a cheap and simple section to add on to your policy – if you need it. Builders and run-of-the-mill tradesmen rarely require professional indemnity cover since there is usually an architect, engineer etc overseeing the project.

Professional indemnity helps to cover gaps in your insurance where a claim may be brought against you for something you have said or advice you’ve given during a consultation, the design process or at any other stage in the project.

Do I need professional indemnity insurance?

Maybe: it depends on your type of business and the project you are taking on. There are several factors you need to consider before you ask your insurance provider for professional indemnity insurance.

Firstly, consider the cost of adding this section to your policy. It is possible to go online and purchase a cheap professional indemnity policy, but it is important to take care to ensure that the product will actually provide the level of cover and support required. If you give us a call, we’ll be able to advise you on whether you need professional indemnity insurance, as well as get you competitive quotes from our market.

How much cover do you require? This can vary widely, and will determine the cost of your premium. As there’s no hard and fast rule, it’s best if you talk to one of our experts to discuss your needs. We’ll need to know the following:

• What is the value of the project?
• What is the absolute worst case scenario for a project and what would this cost to fix?
• What are the clients asking for?

Not all builders need professional indemnity insurance: but for those who do, it’s an essential part of protecting your business against unforeseen circumstances.

How do I get professional indemnity insurance?

All you need to do is pick up the phone, and let us know all about your project. We can then advise you if professional indemnity insurance is the best way to go, and fetch you the most competitive quote possible.

When purchasing professional indemnity insurance, we’ll need to know the usual details about your business such as how long you’ve been trading and the general type of work you complete. But we also need to know how long you need the policy to be in force.

One of the key differences between professional indemnity and other insurance policies is that it is written on a “claims made” basis: this means that it doesn’t matter what policy is active when the work is completed, it’s the policy in force at the time the claim is made which deals with it.

When it comes to building works, this can have a big impact. Let’s say you complete a big project in 2022, but something goes wrong later down the line and the client makes a claim against you in 2030. As a result, whatever professional indemnity policy you have in 2030 will deal with it – not the policy you had when you carried out the work. That’s why it’s important to consider that you may need to keep paying for the policy long after projects are completed – and maybe even beyond your retirement.

Give us a call today and we can help you with your tradesman insurance and we can advise on any professional indemnity cover needs that you have.