Does My Construction Business Need Professional Indemnity Insurance?

The short answer is yes, if you wondering why do I need professional indemnity insurance then continue reading! When starting a business everyone's biggest worry is what about if I make a mistake? Professional Indemnity Insurance is one of the best ways to reduce the risk, protect your company and help prevent any financial issues. This insurance isn’t just for certain tradespeople, it covers everyone in the trade sector from plumbers to roofers, to electricians.

Professional Indemnity Insurance is designed to protect you if clients claim a service is inadequate. Offering a professional service or giving advice, you could be sued if the recipient is unhappy with your work. The type of scenarios Professional Indemnity Insurance can cover:

• Building mistakes
• Bad advice
• Breach of confidential information
• Poor workmanship
• Defamation
• Health and safety issues
• Poor quality of work
• Breach of contract
• Negligence
• Financial losses for your customers resulting from your work

The insurance will help you cover the court costs and any compensation payments that may happen.

You might think that I know what I am doing and I don’t make mistakes but at the end of the day we are all human and at some point, a mistake is bound to happen and the result could cause accidents, injuries or damages to your customer. It doesn’t matter if it was an honest mistake or an act of negligence, you could be liable either way and the compensation payments can stack up fast!

In the end, insurances are there to protect you from financial trouble when the worst happens and this is no different. The average cost for a builder is around £300 a year and for an architect, it can be as high as £1400. When applying for Professional Indemnity Insurance there are many factors that will affect the fee you pay such as the type of work, level of cover and insurance history.

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Am I Required By Law To Have Professional Indemnity Insurance?

You are not required by law to have professional indemnity insurance however many clients may want you to have this in place. If you are with an association or a professional body they often have demanding requirements in order for you to join such as having the appropriate insurances in place.

It is good practice to have appropriate insurances in place to protect yourself, your business and the clients you are working for.

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What Is The Difference Between Professional Indemnity Insurance And Public Liability?

Professional Indemnity and Public Liability Insurances are both designed to add a layer of protection to your business whilst both are quite similar to each other, Professional Indemnity Insurance covers the same elements as Public Insurance however it includes bad advice or issues with your work that affects your clients.

Public Liability Insurance also covers the general public from your workplace in the chance of any injuries or negligence.

Both insurances are not required by law however they both protect your business from any legal or financial complications which we highly recommend you have in place.