What is Professional Indemnity insurance?
Professional Indemnity or PI insurance protects your business against costs associated with claims made by customers over alleged professional failures on your part - including negligence, failure to act or breaching your duty of care.
Who needs Professional Indemnity insurance?
Most financial services firms are required by the FCA to hold appropriate PI insurance. Many clients will only work with firms that hold it. But any business providing services would be well advised to take out PI cover. Without it, defending even a baseless claim can drain financial resources and management time. In an increasingly litigious world, PI insurance is an important risk management tool that safeguards the value of your business.
How much Professional Indemnity cover should you hold?
The FCA stipulates certain types of firms hold PI insurance with a specific minimum limit of liability. Your compliance officer should be able to advise you on this, but in general terms, you should select a policy limit that properly reflects the scope and scale of activities your firm undertakes.