Do tradespeople need professional indemnity insurance?

Public liability covers injury and property damage. It does not usually cover financial loss from your advice. Hiscox lists professional advice as an exclusion on its public liability product.²

What professional indemnity covers

Simply Business says its policy covers loss-causing advice, certification errors and negligence. It also lists breach of contract, intellectual property infringement and damage to documents. Limits run from £50,000 to £5 million, and its advertised price starts at £6.74 a month.¹

When a tradesperson might need it

• You design a system, such as heating, electrics or a structure.
• You specify products a customer then buys.
• You survey or give written reports.
• You sign certificates that others rely on.
• You work on design and build contracts.

A simple example

A heating engineer sizes a system for a large house. The work is neat and nobody is hurt. But the system is too small and has to be replaced. The customer's loss is financial. That is the sort of claim this cover exists for.

The point most people miss

Many of these policies work on a claims-made basis. That means the policy in force when the claim is made is the one that responds, not the policy from when you did the work. If you stop your cover, past jobs may be left exposed. Ask your broker about run-off cover before you retire or close a company.