PI insurance is one type of protection you can buy to help ensure you are working legally, safely and astutely.
At Larsen Howie, we specialise in a few different areas of the market, and can also offer guidance on what is best for you. But we feel it can be beneficial to go into more detail about the specifics of what we offer. This will help provide greater clarity about some of the industry terms you see bandied about, and what these terms actually mean.
What is PI insurance?
So lets focus on contractor professional indemnity insurance. You might well have seen the term, or even have such a policy in place already. But what is professional indemnity insurance?
Professional indemnity insurance helps cover legal costs in the case of lawsuit filed due to alleged negligence by the contractor.
In simple terms, if your client feels you haven’t provided the service you were contracted to do, to the level agreed upon, they could sue you. That’s obviously not on any contractor’s bucket list. But it is one of the realities of contracting if the services you provide are not up to scratch.
Now, the vast majority of contractors do good work. Their services meet the required standards and walk away with their take home pay satisfied that both sides are happy. But there’s only a slim chance of getting to that stage if you don’t have professional indemnity insurance. Why? Well, essentially, you’re less likely to get a contract without it.
If you put yourself in the shoes of your client, it makes sense that they want to ensure that if things go awry with a contractor and what they deliver, they won’t lose out any more than they already have.
Is PI a legal requirement?
Having said this, in most cases, there’s actually no legal requirement for a contractor to hold professional indemnity insurance. You can work as a contractor without it. But, as mentioned, securing a contract will be difficult, if not impossible, without a policy in place because the majority of clients and/or agencies just won’t take that risk.
Then there’s the added problem of potential financial difficulties if a claim is brought against you. A lawsuit is not renowned for being cheap, and if your client does file a lawsuit against you and you’re not covered, costs can quickly mount up.
That’s why it makes good sense to get yourself covered. You could be the most confident, qualified and professional contractor in the world. But one simple mistake could jeopardise your contract. Further, the ramifications could jeopardise your financial stability moving forward.
At Larsen Howie, we provide professional indemnity insurance tailored for the specific needs of contractors. If you have questions or would like to discuss taking out cover with us, get in touch today, or click here to get your instant quote online.