Professional Indemnity Insurance – what is a retroactive date?

What is Professional Indemnity Insurance?

Professional Indemnity Insurance (PI insurance) is essential for businesses that give advice, have access to client’s confidential information or carry out manual work or design.

Examples of the type of contractors that would benefit from this insurance include:

• Business consultants
• Designers/web designers
• Engineers
• Construction contractors
• Architects
• Interior designers

PI insurance will protect you from loss of documents or data, negligence or if a client has an issue with the work carried out.

What is meant by a ‘retroactive date’ in Professional Indemnity Insurance?

As with most types of insurance, you need to make sure you completely understand the policy that you’ve taken out and are aware of any instances whereby you won’t be covered.

The term ‘retroactive date’ is the date from which you’ve held ‘uninterrupted Professional Indemnity Insurance’, or a date in the past that your insurance has agreed to cover you from.

If you don’t have such an agreement in place, and you are contacted by a client that you carried out work for before you took out the insurance, then unfortunately you will not be covered.

What other types of insurance should I consider?

Of course, all insurances are dependent on your industry and the type of work you carry out, but here are some common insurances often taken out by contractors:

• Employers’ Liability Insurance – this insurance is a legal requirement if you hire staff and will need to be put in place as soon as you start up your business. It will help to pay compensation should an employee become ill or injured at work.
• Public Liability Insurance – if your firm carries out work in public areas, has members of the public onsite or your staff visit customer’s homes for example, then this type of insurance is a must.
• Cyber Insurance – cyber attacks are becoming increasingly prevalent and can be really costly to a business should they fall victim. Cyber insurance can help to cover legal claims, compensation costs and fines under GDPR.

We hope you found this page helpful. If you’d like to sign up or need any further information, please give us a call on 01442 795 100 or you can email jaime.thorpe@dolanaccountancy.com. There’s also the option to contact us via live chat.