Professional indemnity can often be a misunderstood area, so we always try to explain things as simply as possible.
If you or your organisation provides advice or information on which people may rely, then you owe a duty of care to ensure its accuracy and /or appropriateness to the situation.
The fact that you don’t charge any fee for the advice or information doesn’t relieve you from that duty in any way. Which means that if someone perceives that they have incurred a financial loss because of the advice you give, they may attempt to sue you for that loss.
Similarly, if you provide a service to “customers” under contract and they perceive that the contract has not been properly or adequately fulfilled they may sue you for the costs of having another contractor complete the work or otherwise correct perceived errors within it.
An important feature of this cover is that it operates on a claims made basis, meaning that any claim or allegation received needs to be reported to your insurer during the period of insurance. Should you receive a claim after cover has expired, despite the event happening when cover was in place, there will be no protection. Should you no longer require cover, we always recommend ‘run-off cover’ in these circumstances.
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