Contractor professional indemnity, or PI insurance, is one insurance policy every contractor must have, but hope never to use. Here are ten basic steps you can take to minimise the chances of having to activate your PI insurance:
Don’t be put off by long and complicated contracts: read every clause. Retain copies of all your contracts, as your PI insurance provider may ask to see them and you’ll need to have them in the event of a claim.
Check the project specifications and confirm you can deliver them. Although your PI insurance covers unintentional breach of contract, you must have taken steps to ensure you are capable of fulfilling the contract.
Every time you complete part of the project, check it meets the specification. Keep copies of documentation showing the checks and positive results, in case you need to present them to your PI insurance provider.
Don’t just hand over your work – proactively ask your client for approval. Keep copies of client acceptances in case of a later PI insurance claim.
Decisions made in meetings can change the scope of your deliverables and what’s covered by your PI insurance. Make notes, recording decisions and how they affect your work, and send confirmations to the client.
If your client changes their mind, that’s OK. But your PI insurance provider may wish to see a paper trail of project variations agreed and signed off by the client.
Storage is cheap and easy so, as long as it does not breach your client’s security rules, keep dated and timed copies of all emails and notes of phone calls.
Always re-read emails before you send them and check the intended recipients. Unintentional breach of confidentiality is covered by PI insurance, but is best avoided!
You never know who might be listening on the train or in a bar, so to avoid PI insurance claims for breach of confidentiality, avoid discussing your client’s business in public.
Don’t forget to renew your coverage, so your PI insurance is there if you ever need it.