subject: Professional Indemnity For Consultants: A LUXURY OR A NECESSITY? [print this page] Professional Indemnity For Consultants: A LUXURY OR A NECESSITY?
What are the characteristics that define a luxury? Most people would agree that it has to be something that you don't really need. And it has to be expensive. Let's start with the second one first.
Professional indemnity insurance, or pi insurance, doesn't have to be that expensive. Policies are available for as little as 165 a year. Not a lot of money when you consider what you're insuring yourself against.
OK, you might be thinking, but 165 is still 165. If I don't need it, why spend it?
For a number of very good reasons.
For a start, you may well be excluding yourself from work if you don't have it. More and more organizations, in the private, public and not-for-profit sectors, are demanding that self-employed consultants hold valid indemnity insurance before they will even consider engaging their services.
Second, you're only human. And humans make mistakes - particularly when under pressure. (And let's face it, in an increasingly competitive world, most consultants working for themselves are under pressure.) If a mistake you make - a small coding error in an ecommerce website, perhaps, or a miscalculation in the design for a load-bearing structure - results in financial loss for the client, you could be held liable for the full extent of that loss. Which, if you don't have any professional indemnity, could be enough to threaten everything you've worked for.
Third, if something goes seriously wrong on a large project, even if it's not your fault, you might still find the finger of blame pointing in your direction. In tense situations, when large losses are at stake, accusations tend to fly. Large organisations, of course, have the resources to bring in the best legal assistance available. Do you? Without professional indemnity cover could you really afford to pay your own defence costs?
In short, it's hard to escape the conclusion that professional indemnity insurance, far from being a luxury, really is a necessity. We don't live in a perfect world. Things do go wrong, even for professionals. Fortunately, all you have to do to protect yourself is follow the link to find the pi insurance cover that's right for you and your business.
