How Much Professional Indemnity Insurance Needed?

[MMEngServ]

Hi Guys,
Hope you can help.

I need to get Professional Indemnity Insurance for my company but Im not sure how much insurance I require. e.g. £25k,£50k,£100k,£250k,£500k,£1mil.

A little about ourselves. We are engineering consultants/procurement team. We do not carry out any manual work or touch the goods that we sell. We only source and supply electrical goods (e.g. electric motors). A customer will call, tell us what they require exactly and we will quote accordingly with drawings and spec sheets for confirmation, they will send us an order and we deliver the goods after which they get a qualified electrician to fit and the rest is in their hands.

I was thinking of approx £250k as adequate, however can anyone confirm?

Thanks in advance for all your advice.

 

[Paul_Rosser]

Is there anything in your sales contract which states your maximum liability ? If not then maybe put something in limiting you to say £50k, then get £100k of cover (usually per year, not per client) and if someone does make a claim then you can increase the cover you have.

 

[Michael Gerard]

Good advice from Paul Rosser regarding limiting your liability. The only thing I would add is £100k is quite small, and I would suggest a minimum of £250k, especially where you get involved in large scale projects (even if your fee is nominal). Get quotes in any event for differing levels of cover - also the level of excess will make a difference on the premiums.

 

[Paul_Rosser]

Good advice from Paul Rosser regarding limiting your liability. The only thing I would add is £100k is quite small, and I would suggest a minimum of £250k, especially where you get involved in large scale projects (even if your fee is nominal). Get quotes in any event for differing levels of cover - also the level of excess will make a difference on the premiums.

Thanks.

The 100k was suggested to me by the company who provided my Insurance as we have a 50k limit in the contract, so the broker said to get £100k and then if someone does make a maximum claim we are left with enough to cover another claim and they would be able to increase my maximum per year at that point.

 

[Michael Gerard]

Thanks.

The 100k was suggested to me by the company who provided my Insurance as we have a 50k limit in the contract, so the broker said to get £100k and then if someone does make a maximum claim we are left with enough to cover another claim and they would be able to increase my maximum per year at that point.

It is going to depend on the merits of the practice insofar as to the type of projects they carry out, the risk etc. However, my experience tells me that they should speak to an experienced Broker, especially as regards to the wording of the cover.

 

[internetspaceships]

Actually all the previous posters should read the OP.

He doesn't advise- he takes specific orders - no advice given.

A good set of T and C will cover it. PI is advice based.

If he is advising customers on what they should use then I'll stand corrected but based upon the OP I'm not sure that he is.

 

[Michael Gerard]

Actually all the previous posters should read the OP.

He doesn't advise- he takes specific orders - no advice given.

A good set of T and C will cover it. PI is advice based.

If he is advising customers on what they should use then I'll stand corrected but based upon the OP I'm not sure that he is.

I had naturally assumed that since the OP required PI, there is an element of design, but on re-reading the post, it is the OP's customers who specify. There is therefore no reason to have PI insurance.

 

[internetspaceships]

Never a problem Charlie Sir

 

[Paul_Rosser]

The way I re-read it the client provides what they need and the OP provides a spec sheet and drawings for the client to sign off. So good T&C's should cover them without the need for insurance.

 

[Paul_Rosser]

The way I read it the client provides what they need and the OP provides a spec sheet and drawings for the client to sign off. So good T&C's should cover them without the need for insurance.

 

[Michael Gerard]

Well, Paul and I both got there eventually, albeit with a little bit of assistance from Internetspaceships! That is what the UKBF committee is for!

 

[internetspaceships]

Well, Paul and I both got there eventually, albeit with a little bit of assistance from Internetspaceships! That is what the UKBF committee is for!

A little bit of assistance with the sublety of a flying brick?

 

[Paul_Rosser]

Well, Paul and I both got there eventually, albeit with a little bit of assistance from Internetspaceships! That is what the UKBF committee is for!

Yup.

Wonder why the OP thought they needed PII in the first place...