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​Wh​at Is Professional Indemnity Insurance?

What Is Professional Indemnity Insurance
Contact Qdos Contractor:0116 269 0999

Professional Indemnity FAQs


Professional Indemnity Insurance Explained

Professional indemnity insurance is a popular business insurance policy among contractors and those offering professional advice and/or services.

What is Professional Indemnity Insurance?


P​rofessional Indemnity Insurance is a business insurance policy which reacts in circumstances where a third party (your client) brings a negligence claim against you, alleging that an error or omission in your services has caused a financial loss.

The policy will look to cover the costs of ​defending your case, such as legal representation, as well as the liability found owing where necessary.

PI insurance is arranged on a 'claims-made' basis meaning that once your policy has lapsed, you will be unable to make a claim even if the incident which gave rise to the claim relates to a period during which your policy was active. It is important therefore to maintain cover until you are no longer subject to the relevant risks this policy covers. See below for more information.

Qdos provides annual policies with a range of indemnity limits (levels of cover) of £1 million, £2 million, and £5 million.

​Who needs professional indemnity insurance?


Professional indemnity insurance is not a legal requirement in the UK, however you may need PI insurance if:

  • You provide professional advice such as consultancy services
  • You handle data on behalf of your client
  • You provide technical design or other ​expert services such as CAD design or bookkeeping
  • Your client requires you to hold professional indemnity as part of your contractual agreement
  • Your professional body or association requires you to hold a suitable PI insurance policy

When Claims Can Occur


There are time limitations that apply for claimants looking to issue negligence proceedings, for the majority of negligence claims the time limit is 6 years following the date of the negligent act. There are certain circumstances in which the time limits would differ if the negligence only becomes apparent at a later date. It is possible to bring a claim outside the six-year limitation period if the damage complained of was not discovered until after the expiry of this period. This is known as 'latent damage', and in these circumstances the claimant has three years from either the date of knowledge of loss or the date when it ought to have reasonably known about the loss. What constitutes what 'ought reasonably to have been known' depends on the circumstances of the case, and specific advice should always be sought. There is a final time limit of 15 years from the date of the defending party's negligent act or omission.

Closing The Company


It is difficult for a negligence claim to be brought against a company that has ceased trading and has been closed, however, there are certain circumstances in which a court can order the company to be restored to the register and for a claim to be pursued against it. This will depend on specific circumstances (for example: if you had knowledge of a claim, or potential claim, at the time the company was closed, amongst other factors) and specific advice should be sought (i.e.from a solicitor).


The Company


About Us

Why Qdos?


Qdos Contractor are one of the leading providers of specialist contractor insurance services in the UK. Our online application process takes only a matter of minutes with all documentation issued instantly. Unlike many other brokers, we don’t hide our premiums until you've provided your details, as we are confident that our premiums, service and product are the best in the market. In addition, Qdos Contractor is one of the leading authorities on the IR35 legislation and have handled well over 1,500 IR35 enquiries on behalf of UK contractors.


Our History


Qdos began in 1988 as a tax consultancy business and has grown significantly over the past two decades, providing expert business services, products and advice. Over the years, Qdos has grown in both size and reputation as a trusted contractor insurance broker as well as an expert tax advisor. Our aim is to provide UK contractors with the assistance and service with IR35 issues they need as well as sustaining excellent quality and competitive premiums in the contractor insurance market.

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