PROTECT YOURSELF AGAINST PROFESSIONAL NEGLIGENCE CLAIMS

Any business or sole trader that provides professional services, consultancy or design work to clients is at risk of professional negligence or malpractice claims.

Mistakes or bad advice that cause a client to lose money can lead to legal action, as the client seeks to recoup their losses. Clients may claim for a range of alleged errors including professional negligence, loss of confidential documents, breaches of data protection, defamation and copyright infringement.

Some professions have a higher risk of claims due to the large potential losses to clients if mistakes are made, for example, architects, accountants or financial advisors – however professionals from all sectors can be at risk of claims, from solicitors through to media professionals.

Recent legal cases have even set a precedent for claims of educational negligence made against teachers and lecturers for a failure to educate and breaching their duty of care to students.

Professional Indemnity Insurance

Professional Indemnity (PI) Insurance protects against financial losses from liability claims made by a client for alleged errors relating to professional work. PI policies will typically cover legal defence costs and provide compensation to clients if the claim is successful.

PI Insurance covers a wide range of risks including:

„ Negligence or breach of duty

„ Errors and omissions

„ Breach of data protection

„ Breach of confidentiality

„ Defamation

„ Loss of client documents

A solicitor acted for Claimants who purchased a residential property in 2007. They were later accused of failing to identify an old tunnel which ran under the property. The Claimants alleged this tunnel rendered their property unmortgageable and claimed for losses of around £200,000. The solicitor had a PI policy and notified their insurer of the claim.

Cyber Insurance vs PI Insurance

With digital connectivity it is easy to share and publish information, the risk is that you share the wrong file containing sensitive information, or become the subject of a cyber-attack where client data is stolen and leaked. Whilst some PI policies may provide limited cover for third party data loss, this is unlikely to be sufficient to protect against the true costs of a cyber-attack or data breach.

Tysers provides Professional Indemnity Insurance to clients in a range of sectors, from financial services and legal professions, to architects and small businesses. We take the time to understand the unique risk factors for every client and advise the best cover to protect your business.