Insurance · 11 September 2015

Insurance in action – Professional indemnity insurance for micro businesses

One business was able to claim to support the refund charges of a sofa
One business was able to claim to support the refund charges of a sofa

We think that exploring some real-life claims is the best way to teach businesses about insurance, so in our insurance in action series we’re looking at the core covers at work.

Last month we covered public liability, so this month we’re looking at professional indemnity insurance – a cover built for businesses that offer advice professionally.

Popular amongst consultants and contractors, it works to protect you from professional mistakes. So, without further ado, lets look at the cover in action.

Sad men

A policyholder produced an advert for a client and sought some unique music for the backing track. Sadly, the music he commissioned wasn’t quite as unique as he expected and he was told he’d infringed copyright law. The policyholder faced a hefty bill but his professional indemnity insurance helped counter the costs.

Total settlement: £27,174

Made to measure (incorrectly)

An interior designer ordered a sofa on behalf of a customer, but unfortunately they’d made some mistakes with the measurements. The sofa was too large for the room so they sought a refund from the supplier, however they refused to budge and take the sofa back. The designer claimed on their professional indemnity insurance and was helped with shouldering the costs.

Total settlement: £5,141

Take me to church

A professional indemnity policyholder was carrying out a property search for a buyer. Satisfied with their work the buyer went ahead and purchased the property, however what they didn’t know was that they’d need to buy some public liability cover. A risky church roof was included in the purchase, so they sought the policyholder for the insurance costs. The policyholder made a claim, and his professional indemnity cover paid the bill.

Total settlement: £2,107

Ultimately, if you’re offering any sort of professional advice then professional indemnity insurance is probably wise. Chances are people are taking financial risks based on what you tell them, so it’s sensible to put a policy in place – just in case. It’ll cover negligent advice, as well as any designs or plans put together incorrectly.

Sign up to our newsletter to get the latest from Business Advice.



Keith Lynn is a senior product manager at Simply Business, with almost ten years of experience – both working and studying – in the insurance industry. He has been with the company for four years as part of the products team. Much of his time is spent working with numerous insurers to improve the products they offer through Simply Business. Prior to his current role, he obtained a BA in International Insurance and European Studies at the University of Limerick.