Behind the jargon: a no-nonsense guide to professional indemnity insurance

Understanding the ins and outs of business insurance can be a struggle. Learn the lingo with our guide.

Safety and insurance

5 February 2019

Do you find phrases like blue-sky thinking or forward planning as clear as mud? Don’t worry, you’re not alone. In their study, Londonoffices.com found that rather than motivating people to work to their best, cliched business speak left many workers feeling confused and out of touch.

Business insurance from just £82 a year*

  • Pay for the insurance you need – not the bits you don’t
  • Guided online quotes – to point you in the right direction
  • UK-based call centres for guidance when you need it
  • We’re working to pay more claims in 24 hours

*10% of our customers paid this or less between January and March 2019.

Not all claims are eligible – each claim is assessed on a case by case basis (see how you can increase your chance of getting your claim paid in 24 hours here). In 2018 we paid 8% of claims in 24 hours and 22% in 48 hours – and we’re working to improve that.

And with its complicated terminology and seemingly undecipherable descriptions, business insurance can be just as perplexing – which makes choosing the protection that’s right for you that little bit trickier.

That’s why at AXA, we’ve made it our mission to make business insurance straightforward, not stressful. With our guide to the 6 Ws of Business Insurance, we’ve ditched the jargon in favour of the need-to-knows: the who, what, why, where, when and hows of business insurance products.

Think simplicity over screeds of text. Concise detail over long-winded definitions. Clarity over complexity.

Because when you’re running a business, every minute counts. And you don’t have a second to spare translating out-out-touch-insurance speech. Cut through the smoke and mirrors of business insurance and make sense of professional indemnity insurance with our guide so you can get back to what you do best: working hard for your customers.

What is Professional Indemnity Insurance?

Professional indemnity insurance protects your business if you’re found to have provided poor services, bad advice or dodgy design, which has resulted in your clients or others losing money.

Although professional indemnity insurance isn’t a legal requirement, not having it could mean that if something does go wrong for a client following your advice, your business could be responsible for the legal fees, expenses, compensation costs or other costs incurred in your defence.

Who is Professional Indemnity Insurance for?

Professional indemnity insurance is useful for businesses that provide advice or a professional service to clients. This normally includes professions like:

  • Designers including web designers, graphic designers and interior designers
  • IT professionals including IT contractors, consultants, programmers and developers
  • Management and business consultants including marketing, training and education consultants
  • Technical engineers including CAD designers, project engineers and building services engineers
  • Fitness professionals such as personal trainers

So, whether you’re a contractor, freelancer, self-employed professional or just looking to protect your business further, professional indemnity insurance could help bolster your sense of security in your work.

Why does my business need professional indemnity insurance?

No matter how skilled you are, no one’s perfect. And every business can be subject to a claim if your advice or services fail to meet a client’s expectations. And with three quarters of business owners saying that they’re concerned about making mistakes on client projects1, it’s clear that getting things wrong is a big worry for business owners.

So, whether your business is accused of inappropriately handling sensitive client information or is facing allegations of a breach of copyright, professional indemnity insurance could help provide the additional peace of mind that many business owners are searching for.

If you’re still deciding if your business needs professional indemnity insurance, it could be a good idea to check with your regulatory or professional body to see if they require your business to hold a professional liability policy prior to working with clients. If you’re an accountant, chartered surveyor, architect, surveyor, financial advisor or healthcare professional for example, then it’s likely that this’ll be the case.

Taking out a professional indemnity policy can not only help protect your business in the event of a claim, it could potentially help you win client contracts too – especially as some clients will only do business with you if you have the proper insurance in place.

When would my business need professional indemnity insurance?

You’re great at running your business and you always strive to provide the best service possible for your clients. We get it. But ask yourself: could your business afford the compensation costs and other expenses if it was sued by a client who experienced financial loss following your advice? If the answer is no, then professional indemnity insurance could be for you.

From IT consultants losing data to accountants getting their sums wrong, we’ve all made mistakes or misunderstood a brief. With professional indemnity insurance from AXA, you can tailor your protection with the following extras, so that your business is protected if the following worst-case scenarios become a reality:

  • Breach of confidentiality: if you unintentionally reveal sensitive information without your client’s consent.
  • Defamation: if you’re accused of libel or slander because of something you’ve said or written.
  • Breach of copyright: if you unintentionally using someone’s intellectual property without permission.
  • Loss of documents: If your own documents or documents in your care are lost or damaged.
  • Dishonesty of employees: If a civil liability claim is made against your business because of fraud or dishonesty by someone working for you.

Each of these claims can prove costly and disruptive if your business is found responsible.

How much professional indemnity insurance cover should I consider for my business?

The level of cover your business needs depends on the risks you face each day. With professional indemnity insurance from AXA, you can tailor your insurance to exactly what you need – up to £5 million – to insure your business against compensation payments and legal costs. And given that AXA provides occupation-specific professional liability cover to over 200 professions, we can have your business’ back whether you’re an accountant, architect or IT consultant.

Professional indemnity insurance covers you for claims you become aware of during the period of the policy. Therefore, you’ll also get the option to purchase cover for previous work your business carried out before your insurance with AXA started. And if you’re retiring or shutting up shop for the final time, we can also cover the work you carried out in the past after your business stops trading.

Plus, we know mistakes can happen at any time. That’s why with AXA Professional Indemnity Insurance, there’s no limit to the number of claims you can make.

Where do I get professional indemnity insurance?

With AXA, getting the professional indemnity insurance your business needs couldn’t be simpler.  Get a quote online today and you’ll get a 10% discount as well as being able to tailor your cover to your business needs. Or, if you’d prefer, give us a call on 0330 159 1520 and get a quote from one of our experienced advisors who’ll give you the price that’s right for your business.

Business insurance should be accessible, not alienating. That’s why we’ve made it our mission to make business insurance simple. Because life’s too short to get bogged down by complex insurance jargon – your time’s better spent running your business.

Work hard, insure simple with AXA

Running a business is hard work. That’s why we’re doing all we can to make insurance simpler. Get a professional indemnity quote from as little as £46* with AXA – simple.

1 The survey of 300 small business owners was carried out for AXA Business Insurance in April 2015.

* 10% of our customers paid this or less for professional indemnity insurance between January and March 2019.