If yours is a service business, such as a consultancy, solicitors or accountancy firm, you will need to be covered in case you make a mistake and your clients pay the price.
If your business charges for services or advice, you should give this cover some serious thought or face paying hefty damages in the event of a lawsuit.
Compensation worth hundreds of thousands of pounds can be awarded for something like your client's e-commerce site going down or getting their contact details wrong on marketing materials.
Policies can cover you for areas such as libel and slander, malicious falsehood, misrepresentation, errors, omissions, negligence and unintentional breach of confidence.
However, the thing about indemnity insurance is you need to be covered at the time a claim is made against you, not when the mistake is made. This is worth bearing in mind if you are planning on selling your business or retiring.
You may also want to look at taking out directors' insurance. Under the Companies Act 2006, which represented the biggest shake-up in company law for more than two years, directors have been given a much greater amount of responsibilities for a wide range of stakeholders, making this cover all the more useful.
It will cover you against personal liability for most civil actions brought against you, including health and safety issues and data protection.
