Business Insurance FAQs

What does professional indemnity insurance cover?

Professional indemnity insurance covers the cost of defending and settling claims that your advice, designs or professional services caused a client financial loss. It typically pays legal defence costs, compensation awarded against you, and the expense of putting faulty work right. Cover usually extends to negligence, breach of professional duty, defamation, and loss of client documents or data.

Who needs professional indemnity insurance?

Any business that gives advice, provides a professional service or handles client data should consider it. Architects, solicitors, accountants, surveyors, IT consultants, designers, engineers and management consultants are typical buyers. It is not required by law in the UK, but several regulators and professional bodies make it mandatory, including the SRA, RIBA, RICS and the FCA. Many commercial contracts also require it.

How much professional indemnity cover should I have?

Limits of indemnity commonly start at 250,000 pounds and rise through 500,000 pounds, 1 million, 2 million and 5 million. The right limit depends on contract requirements, the size of the projects you work on and the loss a client could suffer. Regulated professions often face a minimum set by their regulator. Where no minimum applies, 1 million pounds is a common starting point for UK SMEs.

Does professional indemnity insurance cover work I did in the past?

Professional indemnity is written on a claims-made basis, so the policy in force when a claim is made responds, not the policy in force when the work was done. A retroactive date sets how far back covered work can go. If you stop trading or let cover lapse, past work is no longer protected unless you buy run-off cover, usually for six years.

What is the difference between professional indemnity and public liability insurance?

Professional indemnity covers financial loss caused by your advice or professional work. Public liability covers injury to members of the public and damage to their property caused by your business activities. A consultant whose report costs a client money claims on professional indemnity; a visitor who trips in your office claims on public liability. Many SMEs need both.

How long can a property be empty before insurance is void?

Most standard property policies restrict cover once a building has been unoccupied for 30, 45 or 60 consecutive days, depending on the insurer. Cover is not usually voided outright, but it is cut back to a limited set of perils such as fire and lightning, with theft, escape of water and malicious damage excluded. Check your policy wording for the exact period.

What does unoccupied property insurance cover?

An unoccupied property policy is written specifically for empty buildings, so cover continues past the point at which a standard policy would restrict it. It typically covers the building against fire, lightning, explosion, storm, flood, impact and subsidence, with theft, escape of water and malicious damage available depending on the risk. Property owners liability is normally included.

Do I have to tell my insurer if my property becomes empty?

Yes. Unoccupancy is a material change in risk, and under the Insurance Act 2015 you must tell your insurer. Failing to do so can allow the insurer to reduce or decline a claim. Tell them as soon as you know the building will be empty, including when a tenant leaves, during a refurbishment, or while a probate sale is going through.

What conditions apply to an unoccupied property policy?

Insurers normally set conditions you must meet for cover to respond. Common ones are weekly or fortnightly documented inspections, keeping the property secure and in good repair, isolating and draining the water supply during winter months, disconnecting non-essential services, removing accumulated post, and keeping the property clear of rubbish and combustible material.

Is unoccupied property insurance more expensive?

Usually, yes. An empty building carries a higher risk of vandalism, squatting, arson, undetected water escape and theft of fixtures, so premiums are typically higher than for the same building occupied. The gap narrows if the property is well secured, regularly inspected and drained down. Short-term policies of three, six or twelve months are widely available.

Do I need office insurance if I rent?

Yes, though you need less of it. Your landlord insures the building itself, but that does not cover your contents, equipment, stock or data, and it does not cover your liabilities. As a tenant you should insure your own contents and equipment, take public liability cover, and hold employers liability if you have staff. Check your lease for what it requires.

What does office insurance cover?

Office insurance is usually a package. It combines contents and equipment cover for furniture, computers and fixtures, business interruption for lost income after an insured event, public liability, employers liability if you have staff, and legal expenses. Buildings cover is included if you own the premises. Many policies extend to portable equipment used away from the office.

Is employers liability insurance compulsory for an office?

Yes, if you have employees. The Employers Liability (Compulsory Insurance) Act 1969 requires most UK employers to hold at least 5 million pounds of cover, and policies are normally issued with 10 million pounds as standard. The main exemption is a limited company with a single employee who owns 50 percent or more of the share capital. Fines apply for not holding it.

Does office insurance cover equipment taken home or off-site?

Not automatically. Standard contents cover applies at the insured premises only. If staff work from home or take laptops to client sites, you need a portable or all risks extension, which covers specified items anywhere in the UK or worldwide. Tell your broker how much equipment leaves the office and where it goes, so the limit is set correctly.

Is SME Cover authorised and regulated?

SME Cover is a licensed trading name of Full-Time Cover Limited, which is authorised and regulated by the Financial Conduct Authority under firm reference number 766466. Full-Time Cover Limited is registered in England and Wales, company number 09241439, at 3rd Floor, 8 Devonshire Square, London, EC2M 4PL. You can check our status on the FCA Financial Services Register.