CHEAP PROFESSIONAL INDEMNITY INSURANCE: How Much Should I Pay?
The easy answer is ‘no more than you have to’. But before you rush into buying the first cheap professional indemnity insurance you find, it pays to do a little research
and make sure you’re comparing like with like. Which is not always as straightforward as it might seem?
Basically, the premiums people are charged depend on two sets of factors relating to the individual on the one hand and the broker on the other.
It’s a fact that some professions are viewed as more risky than others. So pi insurance for a structural engineer or an environmental consultant, even cheap pi insurance, is likely to be rather more expensive than it is for a graphic designer or a marketing consultant.
And rates will also vary depending on the size of your business and the territories in which you do business. So, if you run a consultancy with a high turnover and you regularly undertake work in, say, the USA where claims tend to be larger and more frequent, you will almost certainly have to pay more than a single professional who only ever works in the UK for UK clients.
Just as no two professionals are the same, no two brokers are either. And your apparently cheap professional indemnity may not turn out to have been such a bargain if the broker in question turns out to have been underwriting his business with insurance companies that can’t, or won’t, pay out in the event of a claim.
You should also make sure you’re clear about what the broker does and doesn’t include as standard. For example, some brokers offer retroactive cover within the price whilst others will charge for it on top of the advertised premium figure.
And don’t forget to look at the policies excess. What appears to be cheap pi insurance may turn out to be very expensive if you end up having to pay a very high excess in the event of a claim.
As you can see, there are a number of things to take into account when asking yourself how much you should actually pay if you’re in the market for cheap professional indemnity insurance. But a good place to start is right here.
