SMEs at risk by delaying professional indemnity cover
Small businesses and freelance consultants delay purchasing professional indemnity (PI) insurance for an average of six months after setting up in business, according to new research undertaken by specialist business insurance broker, PolicyBee.
The survey also found that 39% of respondents did not purchase professional indemnity insurance until at least three months after they had been in business, with 20% waiting two or more years until they purchased professional indemnity insurance cover.
The industries or professions deemed to be most ‘at risk’, (due to respondents leaving the purchase of PI insurance for the longest amount of time) are: Design; Engineering; and Marketing & Communications
On average, 43% of businesses in these three sectors waited two or more years before purchasing professional indemnity insurance.
In contrast, the research revealed that 90% of accountants purchased professional indemnity insurance straightaway, with the remaining 10% purchasing cover within six months, making them the quickest sector to purchase indemnity insurance.
Valerie Hockley, Managing Partner at PolicyBee, commented: “It’s encouraging that more than half of the respondents clearly recognise the importance of professional indemnity insurance by purchasing cover immediately. However, we were shocked to discover that many other businesses waited until they’d been in business for some time, before obtaining cover. It is particularly striking that one in five respondents had been in business for two years or more before purchasing professional indemnity insurance, during which time they’d have been exposed to a considerable risk.”