When it comes to considering the insurance types that your business needs, the question of whether you offer a product or a service is key. But how do you ascertain this when you work in the modern knowledge economy?
For example, IT firms tend to span both areas. IT equipment, hardware and other physical assets can easily be tagged as products. IT consultancy, support, strategy and delivery can more clearly be identified as a service. But what about something that exists digitally – cloud deployed software packages, for example? Are these more aligned to a service or a product?
Why it matters
The question is important when it comes to ascertaining whether or not you need professional indemnity insurance.
This protects contractors, firms and professionals who provide knowledge, advice or skills as part of a service package. Certain professions are legally obliged to take out this kind of insurance as part of their work – solicitors and financial advisers for example – but IT professionals who advise, guide and consult as part of their roles often take it out as well.
Knowing where you stand
For IT firms, the reality is that both services and products are likely to be offered and should both be covered.
If professional indemnity insurance is already in place, read the small print carefully to check for terms and definitions, and check too as to whether past business activity is covered. For example, if a claim was made against negligent advice given in a professional capacity a year ago, would your current policy cover you?
Business and professional insurance products can be complex and it is easy to misunderstand the terms and scope of an insurance policy and inadvertently find that you have invalidated your protection against a claim.
To avoid this, contact our expert team for advice and guidance. We will assess your situation and provide tailored advice for your particular needs, helping you to operate your role in a way that is protected, safe and secure from any claims. Call us on 0207 648 4343. Or complete the contact form below and we will call you.