Contractor professional indemnity (PI) insurance helps protect you against the risk of clients claiming you have made a mistake or been negligent. PI insurance can also help you to win lucrative new contracts within the UK’s public sector, because as part of their procurement terms and conditions, many public sector clients demand high levels of PI insurance cover.
Central government departments, such as the Home Office or Department for Business, Innovation and Skills, use large numbers of expert contractors to deliver a range of IT, engineering, management, marketing and financial services. But to ensure maximum protection for taxpayers, public sector bodies often include minimum PI insurance requirements in their pre-qualification questionnaires for tenders.
It is often the contractor best able to present themselves effectively to a client and move quickly, demonstrating they already have PI insurance, who wins the work. This is also true of public sector clients. So, if you clearly state that your PI insurance is at the level required by the invitation to tender or contract ad, your bid or CV won’t get rejected simply because you haven’t yet arranged your PI insurance cover.
Different public sector clients are likely to specify various PI insurance coverage requirements. Whereas a local authority assignment to roll out an internal communications campaign could ask for £1m PI insurance coverage, a government agency offering a major IT project migrating mission-critical systems to the cloud could ask for £5m PI insurance coverage or more. Always check you have the PI insurance cover required before bidding or applying.
Once you have passed the first stage of a public sector tender process, or secured an interview following your contract application, you will be required to provide evidence that your company actually has the PI insurance cover you say it has. For most contractors this is quite straightforward, because you will receive a policy schedule and PI insurance certificate with your PI insurance documentation.
Your policy schedule will clearly state that your limited company, which will be providing the services to the public sector client, has PI insurance to a specified level. It will also provide the dates that the policy is in force and any geographical limits. Having up-to-date PI insurance at the right level of cover will help you secure public sector contracts.