Avoid a professional indemnity insurance claim
Although professional indemnity insurance is an important safety net when something goes wrong, there are a few simple lessons that can help you to manage your risk and avoid a professional indemnity claim, ensuring your business is secure.
Constant communication and feedback
Communication costs nothing in the modern world, so make the most of it. There is no reason why either party should be left in the dark over progress or quality control. Stay in close contact with your client throughout the contracted period, and seek feedback on completion of each step of your work. To develop this point further, if you are able to have your client sign off on work you have completed, then you will have greater recourse to dispute a claim further down the line. Retain copies of each communication for your policy providers to refer back to later, should a problem arise. This can help you avoid a professional indemnity claim.
Use discretion
As a contracted service provider, you may have access to information about a client's business that they would wish to remain private. As such, every client will expect you to adhere to some level of confidentiality and, typically, complying to these needs is very straightforward. Do not make a mistake that leaves you exposed to a professional indemnity insurance claim, however. Avoid discussing clients in public spaces, and try to break the habit of using the “Carbon Copy” (CC) field when sending out emails, as you will expose the contact details of every person you have contacted. Use the blind option (BCC) instead.
Manage client expectations – and know your limits
PI insurance will cover an unintentional breach of contract. However, a service provider must be certain of their ability to deliver specified work before entering into any professional agreement. Although it is healthy to retain confidence in one's own abilities, taking on a workload that is beyond your capacity – or levels of experience – may result in a claim. A failure to demonstrate competence during this claim may mean you are not covered by your policy when you need it the most.
Respect the contract
Respecting the contract means more than fulfilling your side of an agreement: it means taking the time to understand what you are agreeing to provide, too. Your contract is crucial for ensuring a positive outcome for all parties, and if you do not know what is contained within each clause, you cannot be certain of the assurances that you have - nor those which you have given. Even the most complex contract should be carefully read from beginning to end. Depending on the value of the contract, you may wish to have it checked by a specialist, and you should certainly retain the paperwork for future reference.
Although these points can help you avoid a professional indemnity claim, the best way to protect yourself is to always maintain your professional indemnity insurance cover so that it's there when you need it, giving you peace of mind.
Risk management is a big subject and these tips are just a few of the many things a business can do to minimise it's risk. For a more detailed discussion please contact us and we will be happy to assist.
DISCLAIMER This guidance note is intended for information purposes only. It is not and does not purport to be legal advice or specific insurance advice. Whilst all care has been taken to ensure its accuracy at the time of writing it is not to be regarded as a substitute for specific advice. If you require specific advice, please contact your broker or call us on 0345 251 4000. This guidance note shall not be reproduced in any form without our prior permission. © All copyright is owned by Professional Indemnity Insurance Brokers Ltd.