Do I need professional indemnity (PI) cover
Insurance is one of those boring but oh-so necessary things - but what exactly is PI?
Professional indemnity cover, or PI, is an industry standard among some professions.
According to the Association of British Insurers (ABI), solicitors, accountants, architects, surveyors and financial advisers cannot conduct business without this type of cover.
Among the creative industries PI is not essential, although large advertising, design and public relations agencies will have PI cover in place.
Journalists are not legally required to have professional indemnity, or its sister insurance public liability cover.
Most staff journalists will fall under the legal umbrella of their employer should their work be the subject of legal action.
But freelancers, particularly those who combine their journalism with corporate or commercial work, will not be, which is where PI cover may prove useful.
Heading: ‘Broad and meaty’
Ashley Baxter, a photographer and founder of freelance insurance provider With Jack, said PI was for “when a client threatens legal action or tries to recover monetary damages as a result of their professional services”.
“This could be advice the freelancer has given or the work they've provided. Maybe they've delivered work late, maybe they haven't met the client's expectations.”
Ashley said PI was “incredibly broad and meaty” and gave the example of a filmmaker who was sued by a company when faulty equipment wiped out their work.
The insurer paid out full costs which would otherwise have amounted to £9,000 out of the freelancer’s own pocket.
Ashley said these cases were rare and most claims tended to come from project management issues.
Clients may insist their freelancers have PI cover because if the freelancer makes a mistake they can recover any money lost.
“For example, and this is a true story, a graphic designer can be hired for a job for £2,000 but if packaging they've designed has gone to print with a mistake that needs to be rectified, this can cost £20,000 to fix.”
What does professional indemnity cover?
Ashley said PI covers defamation, libel, and slander. “In fact we have one such claim ongoing where a writer published something online and they are now being accused of defamation.
“So far there have been no monetary damages accompanied with the defamation claim, but the fact the third-party has resorted to involving their legal team in a bid to have the writer remove what they've written means the freelancer's insurance has been triggered.”
What about public liability cover?
Often mistaken with professional indemnity cover, public liability pays out for legal claims around physical accidents and injuries to third-parties,
Ashley said: “We've been operating for eight years and have yet to have a public liability claim made against any of our customers, but that's because we work with freelance creatives.
“They're low risk when it comes to accidents and injuries because they're not operating heavy machinery.”
“The good news is that journalists may not necessarily need public liability but you'll find lots of clients require freelancers to have public liability and it's super cheap.”
The other good news is that the cost of PI and public liability is relatively cheap, ranging from between £10 to £30 a month.
“This depends on the level of cover, but this can increase if you need to cover US work.”
Professional indemnity insurance v public liability insurance
PI is offered on a claims-made basis so the insurer will only cover you for claims made while you hold the policy. So if a claim is made against you after your policy has expired – even if the incident occurred while your policy was in place – you will not be covered.
New claims can alos be brought against you for up to six years after an alleged negligent act.
Public liability covers claims made by members of the public and covers personal injuries, It covers loss of or damage to property and death. It also covers incidents that occur on your business premises so if you run a business from your home and people visit you, you may need public liability insurance.
If you have employees you will need additional employers’ liability insurance.
Where and how to buy PI cover
The NUJ has an arrangement with Jensten which offers a specialist professional indemnity insurance for freelance writers and covers areas of law such as defamation, breach of copyright, breach of confidence and privacy. It also contains public liability insurance.
They offer a 12.5% discount to NUJ members. https://jensteninsurance.co.uk/business-insurance/professional-risks-insurance/freelance-authors-
insurance/
The following companies also offer professional indemnity insurance:
Hiscox https://www.hiscox.co.uk/business-insurance/professional-indemnity-insurance
Direct Line https://www.directlineforbusiness.co.uk/professional-indemnity-insurance
With Jack https://withjack.co.uk/
ePolicy Bee https://www.policybee.co.uk/professional-indemnity-insurance
You can buy public liability insurance directly from an insurer or from a specialist broker through the British Insurance Brokers’ Association (BIBA).
A copy of this article appeared in The Journalist - the magazine of the National Union of Journalists