Professional Indemnity Insurance - Why Is Retroactive Cover Important?

Whether you're a freelancer, a self-employedaccommodate the client's future expansion. Again, it's
consultant or a professional practice firm, you'reonly when the client's business does expand, and the
probably already aware of the need for professionalnumber of system users grows, that it turns out the
indemnity insurance, or pi insurance as it is oftensystem wasn't that flexible after all.
referred to. It's designed to provide you with financialIn either case (or, indeed, in any similar case relevant
protection if a client makes a claim against you,to your particular profession) the simple fact of
alleging loss or damage as a result of your negligence.having a pi insurance policy in place at the time the
So you might be thinking that if you take out somemistake came to light, would not, in itself, provide
professional indemnity cover today, everything will beany protection. The policy would need to provide you
alright.with cover for when the mistake was actually made.
That depends.But is it possible to insure yourself against the
Because there can often be a significant time lagconsequences of something you might already have
between a professional mistake being made and thedone?
consequences of that mistake being felt.Fortunately, it is. By ensuring that retroactive cover is
For example, a consultant engineer might design aincluded in any professional indemnity policy you take
roof which he claims will withstand the weight of aout. And, indeed, only by doing so will you obtain the
certain amount of snow. But it's only when thattrue peace of mind that professional indemnity
amount of snow actually falls that it becomesinsurance is designed to provide.
apparent that he made an error in his calculations.That's why retroactive cover is so important. To find
Or take the case of an IT contractor who designs aout more, call 0870 752 5455 or email
system with the flexibility, so she states, toinfo@professionalindemnityinsurance.co.uk.