Frequently Asked Questions

Public liability insurance and professional indemnity insurance are types of business insurance that cover compensation claims, though the nature of these claims differ. The difference between public liability and professional indemnity insurance is that public liability is tailored for claims by members of the public for injury, illness or damage while professional indemnity covers claims by clients for professional mistakes or negligence. While we all hope that business will go without a hitch, having public liability and professional indemnity insurance can offer peace of mind that if something does happen, you’re covered

If you didn’t initially choose to take out PI insurance, but later down the line realise the benefits for your business, it’s not too late to cover previous work done. When taking out your PI policy, you can ask for the policy to be backdated. The underwriter will want to be satisfied that you are not buying the policy with an ulterior motive – for example that if, after a few questions, it seems as if a claim may be coming your way.

But if they are satisfied it was really an oversight and (with hindsight) a mistake, you may be offered terms to cover work previously done, with an agreed retroactive date prior to the start date of your new policy – however, you should expect to pay for this. The insurer is taking on additional risk, so this is likely to be reflected in the premium.

So, yes retroactive date is a technical term for the industry, but one it’s important for small business owners to understand. Do you know how far back your PI policy covers you for work done? If the answer’s no, you may want to check your policy with your insurer for peace of mind.

On the assumption that your business needs PI insurance, that you offer advice or professional services for example, then you should consider buying a policy from the first day you start trading to cover any room for error from day one.

When buying a policy, one question you will be asked is from when you want the policy to run. If you have an existing PI policy in place, you should tell the new insurer the date that existing policy started – this becomes the “retroactive date”. The new policy will then start (the “inception date”) and work done before the inception date with the new insurer, all the way back to the retroactive date, will be included.

A retroactive date is the date from which you have held uninterrupted professional indemnity insurance cover (even if you changed insurer during this time) or a date in the past from which your insurer has agreed to cover you. Any claims that arise from events prior to this date is not covered by your insurance.

Your buildings sum insured must represent the full rebuilding cost to you of your property at today’s prices inclusive of materials and labour (rather than the market value). You should also make due allowance for your VAT status if you are unable to recover VAT.

Be aware of additional design, planning, legal and professional, and site clearance and debris removal costs.

For expert independent professional advice you can contact the Royal Institute of Chartered Surveyors (RICS).

For general contents – you must insure for the full replacement value at today’s prices.

For stock, the values must represent the replacement cost to you as the policyholder. Costs can vary depending on your position in the supply chain (manufacturer, wholesaler, retailer or the end consumer).

For general contents – you must insure for the full replacement value at today’s prices.

For stock, the values must represent the replacement cost to you as the policyholder. Costs can vary depending on your position in the supply chain (manufacturer, wholesaler, retailer or the end consumer).

Yes. A variable level of cover is available against theft of your commercial property stock and contents, as well as optional covers against theft of money on the premises. Insurers security requirements will take into account your location, a type and amount of theft attractive property, i.e. stock, computers, business equipment as well as possessions.

When you take out or renew a policy including employers’ liability insurance with us, we will provide you with a certificate of employers’ liability insurance that will state the companies covered by the policy. This must be displayed where your employees can read it. You may display your certificate electronically but if you choose to do so you must ensure that your employees know how and where to find it and have reasonable access.

Any business employing any staff (whether they are full time, part time, labour-only sub-contractors or volunteers) needs employers’ liability insurance as a legal requirement. One of our advisers will be able to add this to your quote, so feel free to ask us.

My business insurance is not as simple as home insurance or car insurance. When a commercial insurance policy is put together, your business will be assessed for potential risk on an individual basis.

If you have had a claim in the past it is good practice to review the cause of loss and take action where possible to reduce the potential for it occurring again. This could be a combination of revised procedures, processes and/or improved security. Demonstrating that you have learned from the incident and implemented risk mitigation factors lowers the chance of claims reoccurring.

Let’s take a look at professional indemnity insurance in action. Here’s an example of how PI insurance could respond when faced with a claim.

A freelance architect found herself facing a claim for allegedly delivering inadequate work that resulted in her client experiencing a significant financial loss.

While every effort was made to ensure the project ran smoothly and without any errors, the project did run into difficulty. Fortunately, she had taken out a professional indemnity policy. This gave her peace of mind knowing any compensation payments she was required to pay were covered, along with legal costs and associated expenses.

On further examination of the claim, it came to light that the issues experienced in the project weren’t the sole responsibility and fault of the architect. She accepted some liability for the problems that arose. The case was resolved swiftly and for significantly less than the client had initially claimed.

Because every business is different, it’s impossible to say how much cover you will need to protect your business against the unique risks it faces. There isn’t a one-size-fits-all approach, so working with a broker who has experience of arranging PI is advisable.

If you work in a regulated profession, like accountancy, there will be minimum levels of cover specified by your professional organisation. For example, ACCA accountants with income up to £200,000 need a PI limit that is greater than 2.5 x their total income and 25 x the largest fee. Royal Institution of Chartered Surveyors (RICS) require their members to only use approved insurers and if your turnover is £200,001 and above then minimum cover that you will need is £1,000,000.

Often, specified levels of PI insurance cover and limits may be written into client contracts, so your PI insurance broker may ask you for this information. As a professional and expert in your field, you do your best to limit your liability. However, it’s very difficult to predict if and when a client will make a claim. In many cases, professionals will opt for higher limits for peace of mind and protection should a claim cost them more than anticipated.

The cost of PI insurance will vary from business to business. The insurer will consider many factors, including:

the level and type of covers required

number of employees

annual turnover

risks associated with your industry

your activities (some might be higher risk than others).

Because of these variables, there is no average premium. Professionals such as insurance brokers, independent financial advisers (IFAs), solicitors and surveyors should expect to pay a higher premium for their PI insurance because insurers consider their business activities higher risk and more complex. However, premiums across the board have been rising since the PI insurance market began hardening in 2019, due to the frequency and extent of claims. The hard market has seen a number of providers exit the market, with those remaining increasing premiums and restricting cover.

PI insurance coverage depends entirely on your policy, so you’ll need to ensure it provides adequate cover for the professional services you provide and the risks you may face. For example, this could include:

civil liability (such as damages and costs) for breach of duty

legal fees and expenses in defending a claim

helplines to help you manage risks

relevant regulatory body requirements.

While you strive to deliver the best service to your clients, occasionally mistakes can happen. PI insurance protects you and your business if your client alleges a financial loss for:

a breach of a professional duty of care or unintentional breach of contract

unintentional breach of confidentiality and copyright.

Some professionals must have PI cover in place to carry out their work as it’s a condition of their regulatory bodies. Examples include accountants, architects, independent financial advisers (IFAS), solicitors, and surveyors. For other professionals, having PI may be part of a contractual obligation. Many choose this cover because of the protection and security it provides if their advice or service fails to meet a client’s expectations. Having PI in place can also play a key role in securing new clients and reassuring existing ones.

Suppose you’re responsible for causing financial loss to your client because of errors or omissions in the advice or designs you have provided. In that case, a PI policy covers any legal costs and expenses involved in defending a claim and compensation payable.

Your buildings sum insured must represent the full rebuilding cost to you of your property at today’s prices inclusive of materials and labour (rather than the market value). You should also make due allowance for your VAT status if you are unable to recover VAT.

Be aware of additional design, planning, legal and professional, and site clearance and debris removal costs.

For expert independent professional advice you can contact the Royal Institute of Chartered Surveyors (RICS).

For general contents – you must insure for the full replacement value at today’s prices.

For stock, the values must represent the replacement cost to you as the policyholder. Costs can vary depending on your position in the supply chain (manufacturer, wholesaler, retailer or the end consumer).

Yes. A variable level of cover is available against theft of your commercial property stock and contents, as well as optional covers against theft of money on the premises. Insurers security requirements will take into account your location, a type and amount of theft attractive property, i.e. stock, computers, business equipment as well as possessions.

When you take out or renew a policy including employers’ liability insurance with us, we will provide you with a certificate of employers’ liability insurance that will state the companies covered by the policy. This must be displayed where your employees can read it. You may display your certificate electronically but if you choose to do so you must ensure that your employees know how and where to find it and have reasonable access.

Any business employing any staff (whether they are full time, part time, labour-only sub-contractors or volunteers) needs employers’ liability insurance as a legal requirement. One of our advisers will be able to add this to your quote, so feel free to ask us.

Business insurance is not as simple as home insurance or car insurance. When a commercial insurance policy is put together, your business will be assessed for potential risk on an individual basis.

If you have had a claim in the past it is good practice to review the cause of loss and take action where possible to reduce the potential for it occurring again. This could be a combination of revised procedures, processes and/or improved security. Demonstrating that you have learned from the incident and implemented risk mitigation factors lowers the chance of claims reoccurring.

Commercial combined insurance is almost like a pick n mix for your business – you explain your needs to us, we find the most relevant covers and put them together for you in one easy-to-use policy. The following factors, amongst others, will play a role in the contents of the package we will offer to you: your business size, location, number of employees, turnover, industry sector, market reach (domestic / foreign), activities, processes and equipment used. Getting to grips with your business intricacies will allow us to better understand risks it is facing on daily basis and suggest a bespoke solution to protect you, the business owner, from them.

The policy covers a variety of risks, but its main pillars are liability and property insurance. Every commercial combined package is built with you as the specific client in mind to match your business requirements.

It can include covers for public and product liability; employers’ liability; work away; machinery and plant; tenants improvements; fixtures and fittings; tools; equipment; computers; electronic items; stock of raw materials; work in progress and finished stock; book debts; money; glass; goods in transit; plus many more. These covers include protection against various perils like fire, theft, storm, flood, accidental damage, malicious damage and more.

Commercial combined insurance is a package policy which can be tailored to specific needs of many business types including salons and aesthetic practices. Even companies operating in the same sector are likely to have different business models, processes, computers, machinery, staff numbers etc., meaning their commercial combined policies will need to reflect their individual requirements. As such commercial combined insurance is the go-to policy for warehouses, wholesalers, manufacturers, workshops, factories, importers, exporters and distributors, and more.

Where Medical Malpractice policies work on a “Claims Made Basis” (see Medical Malpractice FAQ’s) Public and Employers’ Liability policies work on a “Claims Occurring” basis. This type of policy responds to claims that occur during the policy period irrespective of when the claim is made.

Public Liability insurance does not respond to claims brought by employees. It only responds to claims made against you by third parties – for example a client or supplier that has been injured or you have damaged their property in the course of your business activities.

To meet claims brought by employees you will require Employers’ Liability insurance, this is a legal requirement for most employers (see “What is Employers’ Liability)

Public Liability is not a legal requirement unlike Employers’ Liability; however, should be strongly considered if you regularly interact with patients or clients during the course of your business activities.

Public Liability will not cover you retrospectively and as such is recommended to be taken prior to you interacting with clients.

Public Liability insurance, while not compulsory, should be considered if:

–  You run a business from home with customers and other third parties visiting your home for the purpose of your business activities

–  You run a business where you visit your client’s home/premises for the purpose of your business activities

–  You own a commercial premises where customers and other third parties visit for the purpose of your business activities

General Liability is primarily a term used for policies in the United States covering claims of Injury, Illness and Property Damage arising from work performed. In the UK this is more widely know as Public and Products Liability.

Public Liability is designed to protect your business from compensation awards and the associated legal costs arising from injury to members of the public or damage to their property during the course of your business activities.

The way in which the injury is sustained makes all the difference to which policy responds. Has your client been hurt due to a slip or trip? Has your client had an allergic reaction to a treatment provided?

In the same way that Medical Malpractice insurance is concerned with claims resulting from injuries, so is Public Liability. That’s because public liability provides cover in the event of accidental damage to third party property or bodily injury but does not extend to the treatment(s) provided. For injuries caused by your treatment(s) of a patient or client you need the protection of medical malpractice insurance instead.

Where Public Liability insurance responds to claims made against you or your business from members of the public for bodily injury or property damage, Employers Liability insurance responds to claims brought by employees of the business for accidental injury or illness sustained during the course of their employment.

When you take out or renew your policy, we will supply you with a certificate of Employers’ Liability. You must display a copy of the certificate of insurance where your employees can easily read it, you are allowed to display your certificate electronically but must ensure your employees know how and where to find the certificate and have reasonable access to it.

As previously stated elsewhere, Employers’ Liability is a legal requirement for businesses that employ staff. Failure to have cover in force may see you fined up to £2,500 for any day in which you are without suitable insurance. This is enforced by the Health and Safety Executive.

Employers’ Liability insurance responds to claims made against the policy holder by employees in respect of injury, disease or death during the course of their employment. It covers compensation costs, damages and legal fees in the defending of a claim whether the policy holder is found liable or not.

Employers’ Liability is a legal requirement under the Employers’ Liability Act 1969 and subsequent modifications. This requires all employers to hold a policy with a minimum limit of indemnity of £5,000,000 however most insurers issue policies with a minimum limit of £10,000,000. There are very few exceptions to the legal requirement but do include:

–  Family businesses, i.e. if all of your employees are closely related to you (as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister). However, this exemption does not apply to family businesses which are incorporated as limited companies;

–  Companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company

The way in which the injury is sustained makes all the difference to which policy responds. Has your client been hurt due to a slip or trip? Has your client had an allergic reaction to a treatment provided?

In the same way that Public Liability insurance is concerned with claims resulting from injuries, so is Medical Malpractice. For injuries sustained from the treatment(s) provided to your patient or client you require medical malpractice insurance. Public Liability provides cover in the event of accidental damage to third party property or bodily injury but does not extend to the treatment(s) provided.

Run-off coverage is a precautionary cover offering protection after you have ceased to practice in case any claims arise from treatments you previously provided. Most commonly renewed on an annual basis with recommended period of at least 6 years.

The Retroactive Date in a medical malpractice policy is very important due to the ‘Claims Made’ basis policies are written on. This will usually be the date at which cover was first incepted and its purpose is to exclude claims arising from any work undertaken prior to date shown.

At each renewal the Retroactive date will be carried forward even if you switch insurers, it is important to make new insurers aware of the expiring retroactive date in your current policy. If there has been a period of time where you did not purchase cover insurers will only provide you with cover from the start of your new insurance policy.

An insurance policy on ‘Claims Made’ basis responds to claims that are made whilst the policy is active for work undertaken after the Retroactive Date shown within the policy schedule (see “what is a Retroactive Date). There has to be a live policy in force at the time a claim is notified in order for cover to respond. Claims Made is the market norm for Medical Malpractice.

The insurer will usually ask for a declaration at each renewal stating that after investigation there have been no new claims or circumstances that could give to a claim that have not been reported, or require a new proposal form be signed by an authorised person/director. Failure to report a claim in the correct policy period may lead to the claim being declined.

Medical Malpractice Insurance provides cover to medical professionals in the event of a claim being made for breach of your professional duties i.e. injury sustained by your client during the course of the treatments provided. 

All medical professionals who deal with patients or clients on a daily basis should consider Medical Malpractice insurance. From a regulatory point of view licensed practitioners are mandated by medical regulations to carry insurance, for all others it is recommended that you are covered to provide you with protection in the event a claim is brought against you. 

The GMC guidelines state consultants will need Medical Indemnity that covers “the full scope of their independent practice”.

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Available coverage for Medical Professionals from our panel of insurers is up to £10m in the annual aggregate.

An Aggregate Limit of Indemnity means the total amount of cover provided during the policy period is limited to that shown in the schedule. For example, if the aggregate limit is £5m that is the maximum insurers will pay in the year relating to claims from a single event or series of losses. 

An insurance policy on ‘Claims Made’ basis responds to claims that are made whilst the policy is active for work undertaken after the Retroactive Date shown within the policy schedule (see “what is a Retroactive Date). There has to be a live policy in force at the time a claim is notified in order for cover to respond. Claims Made is the market norm for Medical Malpractice.

​

The insurer will usually ask for a declaration at each renewal stating that after investigation there have been no new claims or circumstances that could give to a claim that have not been reported, or require a new proposal form be signed by an authorised person/director. Failure to report a claim in the correct policy period may lead to the claim being declined.

The Retroactive Date in a medical malpractice policy is very important due to the ‘Claims Made’ basis policies are written on. This will usually be the date at which cover was first incepted and its purpose is to exclude claims arising from any work undertaken prior to date shown.

​

At each renewal the Retroactive date will be carried forward even if you switch insurers, it is important to make new insurers aware of the expiring retroactive date in your current policy. If there has been a period of time where you did not purchase cover insurers will only provide you with cover from the start of your new insurance policy.

Run-off coverage is a precautionary cover offering protection after you have ceased to practice in case any claims arise from treatments you previously provided. Most commonly renewed on an annual basis with recommended period of at least 6 years.

The way in which the injury is sustained makes all the difference to which policy responds. Has your client been hurt due to a slip or trip? Has your client had an allergic reaction to a treatment provided?

​

In the same way that Public Liability insurance is concerned with claims resulting from injuries, so is Medical Malpractice. For injuries sustained from the treatment(s) provided to your patient or client you require medical malpractice insurance. Public Liability provides cover in the event of accidental damage to third party property or bodily injury but does not extend to the treatment(s) provided.

Employers’ Liability insurance responds to claims made against the policy holder by employees in respect of injury, disease or death during the course of their employment. It covers compensation costs, damages and legal fees in the defending of a claim whether the policy holder is found liable or not.

​

Employers’ Liability is a legal requirement under the Employers’ Liability Act 1969 and subsequent modifications. This requires all employers to hold a policy with a minimum limit of indemnity of £5,000,000 however most insurers issue policies with a minimum limit of £10,000,000. There are very few exceptions to the legal requirement but do include:

​

– Family businesses, i.e. if all of your employees are closely related to you (as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister). However, this exemption does not apply to family businesses which are incorporated as limited companies;​

– Companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company.

As previously stated elsewhere, Employers’ Liability is a legal requirement for businesses that employ staff. Failure to have cover in force may see you fined up to £2,500 for any day in which you are without suitable insurance. This is enforced by the Health and Safety Executive. 

When you take out or renew your policy, we will supply you with a certificate of Employers’ Liability. You must display a copy of the certificate of insurance where your employees can easily read it, you are allowed to display your certificate electronically but must ensure your employees know how and where to find the certificate and have reasonable access to it. 

Where Public Liability insurance responds to claims made against you or your business from members of the public for bodily injury or property damage, Employers Liability insurance responds to claims brought by employees of the business for accidental injury or illness sustained during the course of their employment. 

The way in which the injury is sustained makes all the difference to which policy responds. Has your client been hurt due to a slip or trip? Has your client had an allergic reaction to a treatment provided?

​

In the same way that Medical Malpractice insurance is concerned with claims resulting from injuries, so is Public Liability. That’s because public liability provides cover in the event of accidental damage to third party property or bodily injury but does not extend to the treatment(s) provided. For injuries caused by your treatment(s) of a patient or client you need the protection of medical malpractice insurance instead.

Public Liability is designed to protect your business from compensation awards and the associated legal costs arising from injury to members of the public or damage to their property during the course of your business activities. ​

General Liability is primarily a term used for policies in the United States covering claims of Injury, Illness and Property Damage arising from work performed. In the UK this is more widely know as Public and Products Liability. 

Public Liability insurance, while not compulsory, should be considered if:

​

– You run a business from home with customers and other third parties visiting your home for the purpose of your business activities​

– You run a business where you visit your client’s home/premises for the purpose of your business activities​

– You own a commercial premises where customers and other third parties visit for the purpose of your business activities

Public Liability is not a legal requirement unlike Employers’ Liability; however, should be strongly considered if you regularly interact with patients or clients during the course of your business activities.

​

Public Liability will not cover you retrospectively and as such is recommended to be taken prior to you interacting with clients.

Public Liability insurance does not respond to claims brought by employees. It only responds to claims made against you by third parties – for example a client or supplier that has been injured or you have damaged their property in the course of your business activities.

​

To meet claims brought by employees you will require Employers’ Liability insurance, this is a legal requirement for most employers (see “What is Employers’ Liability)

Where Medical Malpractice policies work on a “Claims Made Basis” (see Medical Malpractice FAQ’s) Public and Employers’ Liability policies work on a “Claims Occurring” basis. This type of policy responds to claims that occur during the policy period irrespective of when the claim is made.