PI Insurance & "As a Result of Negligence" Claims

Professional Indemnity Insurance

Throughout the past year, the number of claims regarding professional negligence has been on the rise, and this shows no intention of slowing down. As a result of negligence claims however, the need for legal and financial cover has also been increasing, thus the demand for professional indemnity insurance in the current business sector is great.

Contractor Professional Indemnity Insurance

For contractors, PI Insurance is an essential policy to hold, as the cover provided protects any claim of professional negligence made against the policy holder, which is a serious concern for self-employed individuals. Contractors are professionals working via limited companies, and because they are self-employed, are 100% liable for their actions. This is important when concerning claims of negligence being made against a contractor, as any cases where a client has made a financial loss due to the contractors error, omission or negligence, may in turn incur huge financial costs to the contractor.

The policy has been increasing in both necessity and popularity through the course of the last financial year, as with more claims of negligence on the rise; the need for the insurance policy is on the up.


The insurance is proving to be a vital product to contractors, but not just because of its recent cases of indemnity when it comes to protection against negligence. Within the contracting community, there has been a dramatic rise in HMRC involvement, namely there has been an increase in HMRC inquiries regarding IR35. The IR35 legislation is a tax issued clause that concerns contractors and their professional status regarding tax benefits, and this last financial year has seen a great rise in investigations and cases concerning IR35.

Professional indemnity insurance is essential to contractors specifically, as the policy is often worded as a necessity within certain contracts. As a result of this, professional indemnity insurance as a product is continuingly being purchased and renewed by most UK contractors. The product indemnifies the policy holder when it comes to financial cover, and provides stable proof that the contractor is operating a business on their own account, making it a double edged sword when it comes to insurance benefits.

By:Steven Bailey

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