What is professional indemnity insurance?
Professional indemnity insurance, often referred to as PI, covers you in the event that you make a mistake or negligent action in a professional capacity.
Professional indemnity insurance will make sure you don’t have to cover all those costs from your own pocket.
The scale of a compensation claim can vary dramatically depending on the circumstances, so it’s important to secure good professional indemnity cover levels so that your business can recover the costs of any legal work and compensation awards from claims, where these can be legally covered, that are successfully brought against it.
This will reduce the financial consequences for your business and mean you can feel confident that even if something does go wrong, you won’t be out of pocket.
What sort of things are covered by professional indemnity insurance?
Professional indemnity insurance covers a host of situations. It may cover something as straightforward as financial loss, or more complex intangibles such as damage to reputation.
For a business that’s involved in events, such as photography (especially wedding photography) or catering, you may find that claims are related to things like emotional harm, disruption to the day or missing a deadline or opportunity, as well as additional costs.
It may be that a client simply isn’t satisfied with your work. A good photographer will prepare for all eventualities, but sometimes circumstances or situations are simply beyond your control – and your work may be impacted.
Cover may be offered for risks like:
- Broken contracts
- Giving poor advice
- Breach of confidentiality
- Breach of copyright
- Causing financial loss through negligence or lack of provision
- Damage as a result of incorrect advice
- Acts of defamation
- Client dissatisfaction
How much does professional indemnity insurance cost?
There’s no simple answer because no two insurance policies are the same. To determine the cost, you’ll first need to think about the elements of cover you require from your insurance package.
The more comprehensive the cover, the higher your premium will cost. But if you don’t have enough cover, you may find yourself even more out of pocket in the event a claim is made against you. It’s a delicate balancing act to find the right mix of affordable premiums and suitable cover.
Other elements involved include the perceived likelihood of you making a claim, the number of employees you have, if any, and where you mostly conduct your photography or videography.
For example, a photographer/videographer who only does weddings will have a higher risk of having a claim made against them by someone than a photographer/videographer who makes nature documentaries in remote areas.
That’s why it’s important to be as clear as possible about the specifics of your business when establishing your policy.
Is professional indemnity insurance mandatory under law?
There is no legal obligation to take out professional indemnity insurance, and not every business needs it. With that in mind, it’s still worth considering, depending on what you do for a living.
The best way to understand whether professional indemnity insurance will be useful is to think about whether your business failing to deliver would have a significant impact on your clients’ well-being (emotional or financial).
Companies that offer services like accountancy or consultancy services or advice will usually need PI, as well as any medical companies, or industries such as photography, catering or home improvements.
If you are in an industry that could lead a company to make significant changes to things like its brand identity or marketing strategy, then you may also need some kind of professional indemnity insurance.
Some business sectors stipulate PI insurance as a prerequisite for membership of an associated professional body. These include professions such as:
- Financial advisers
- Some sectors within medicine
Depending on who your clients are, you may find that up to date PI insurance is a part of your contract requirements.
How exactly does professional indemnity insurance work?
The best way to explain how PI insurance works is by focusing on a specific industry to look at examples.
Within sectors like photography and videography, there are many different areas of practice. PI for photographers and videographers needs to cover specialist photographers working in areas like:
- Weddings and events
- Commercial and business
Each of these subsections of the industry will involve slightly different risks, but there is some commonality. Professional indemnity insurance for photographers and videographers will typically cover:
- The costs of re-shooting.
- Emotional damage – such as an allegation that a wedding or other event has been ruined
- Damage to reputation
- Damage to public persona
How to find good professional indemnity insurance for photographers and videographers
Professional indemnity insurance is a highly specialised field, so it’s important to approach a company that specialises in your industry.
At Aaduki, you’ll find a team of experts who understand the needs and working practices of photographers and videographers. Alongside specialist professional indemnity insurance, we offer cover for all aspects of the photography industry, including equipment cover, public liability insurance, cover for hired equipment as well as cover for equipment on the move.
Get a quote
We have a team of dedicated insurance specialists waiting to help you discover your perfect professional indemnity insurance policy. If you’d like to arrange a quote, contact us today.