Insurance brokers arranging business insurance for SMEs might be missing a cross-selling opportunity if they forget about miscellaneous Professional Indemnity, especially at a time when the new economy is booming and new forms of work are emerging.
Of course, brokers are perfectly acquainted with specialist PI policies. When approached by a solicitor, a surveyor or an accountant, they will think PI straight away. That’s quite natural when some professional bodies require it or when it’s a must-have in those occupations to win contracts. However, many other roles can benefit from PI cover.
The main purpose of any PI policy is to cover claims arising from a breach of a duty of care owed to clients or others. That means this type of policy is relevant to any person or business providing advice, service or designs to clients who could lose money as a result of their negligence. Policies also cover breach of confidentiality, defamation, loss of documents or dishonesty of employees. And, let’s face it, many white-collar jobs are exposed to these types of claims, whether they are well founded or not.
So, if a client is buying office contents insurance, the broker may want to consider professional indemnity. The same goes if they are arranging public liability or employers’ liability cover, and perhaps even directors’ and officers’ insurance.
This could all be of particular value to one-man bands and small businesses that couldn’t take the financial blow of a costly claim.
It is also especially relevant for people who don’t fit traditional work models – for instance, consultants or people with multiple activities – or, perhaps even more so, if they work in emerging sectors like coaching, web design, programming, social media or some obscure venture.
Miscellaneous risks
PI cover will pick up claims in four main areas: negligence, intellectual property (IP), defamation, and breach of confidence.
Negligence disputes can be expensive. A mountain bike instructor was sued for millions of pounds after one of his pupils – a lawyer – fell on his head and was left paralysed. He’d told the beginner rider to cycle at speed down a slope.
Intellectual property claims may include unwittingly infringing someone else’s IP, for instance by playing copyrighted music in your YouTube video outside of ‘fair use’.
Social media and blogs are fertile grounds for defamation, like when this vegan vlogger claimed another vegan vlogger was performing sex acts on camera.
As for breach of confidence, consultants often have expertise in one specialist area, hence tend to advise clients from the same sector. A slip of the tongue or a mis-directed emailed might reveal a competitor’s trade secret.
Hyphenated careers
With more and more people having multiple jobs, or an activity on the side of their main occupation, the market for miscellaneous PI is expanding.
The Association of Independent Professionals and the Self-Employed (IPSE) recently stressed how the internet has enabled more varied working. Its latest figures show that over 300,000 self-employed people in Britain are working two or more jobs.
The BBC reported on those side hustles turned fully fledged businesses by profiling so-called ’Slashies’, including a dog groomer/crochet tutor/security guard. Difficult to be more miscellaneous, and probably quite rare.
Perhaps a more common profile will be of a multi-talented individual starting an online business from home, possibly as a coach or a consultant – and definitely needing professional indemnity.
Brokers are perfectly placed to identify these new customers and give them advice about the type of cover they need. They’ll probably find there is something on the side for them too.
