"Claims made basis" is a type of cover used by professional indemnity insurance. This policy type covers claims made and reported to the insurer during the policy period.
If you’re wondering if professional indemnity insurance is the same as public liability, the answer is no - they are both legal covers and protect you and your business against legal claims, but they mitigate different risks.
For small businesses, liability insurance cost can start from as little as £80 a year but it can also rise to several hundreds. The average cost for a small business in the UK is around £220 - £350 a year. The price of liability insurance fluctuates based on the required insurance limits, industry, business size, and claims history.
Professional indemnity insurance provides peace of mind by covering you against potentially costly negligence claims.
Freelancers and small businesses often say “I don’t need insurance, I’ve got no issues with my clients”. And hopefully that’s how it will always be for you. But every now and again something happens and client relations rapidly change. Just like it did for these business owners.
Imagine you’ve just delivered the last piece of work for your client and plan to take some time off, perhaps for good. Cancelling your professional indemnity cover is an option but not a very good one.