The cost of bad advice for small businesses – understanding professional indemnity insurance

In my work as a digital marketing consultant* I’ve come across a lot of small businesses which have been given bad advice. It might be that they’ve had an agency managing their social media accounts, and they’ve not been happy with the results, or it could be that they’ve invested in a new website, only to discover it wasn’t really fit for purpose. All in all, it seems that running your own business can be a bit of a minefield.

(*I always feel very grown-up when I call myself that. It’s hard to reconcile that persona with the fact that last week I bought myself a plush grey and pink tortoise and called it Alan.)

It can actually be a very costly minefield, as being on the end of bad advice isn’t just a case of ‘Oh well, that didn’t work, what next?’ It can have a real impact on your business – financially and in terms of your reputation.

As the person giving the advice then, the pressure is on.

I’ve noticed a growing trend in the last couple of years for bloggers to start offering advice, particularly with things like web design and social media. This is great – it’s brilliant to see opportunities opening up for people to run their own businesses – but it also comes with risks.

Did you know for example, that customers could claim for compensation if they think your advice is negligent and has caused them a financial loss or damaged their reputation? Many clients may also ask you to provide proof of professional indemnity insurance before they work with you, especially if you’re working with local authorities or large companies.

If you provide a professional service, be it design, marketing, accountancy, IT, photography, or one of many other professions, it’s worth investing in professional indemnity insurance. This is the insurance that covers you should the worse happen, and your clients lose out due to any negligent advice or service you provide.

**Twitter party plug alert**

If you’re not sure about the types of insurance that your business needs, why not come along and join my Twitter chat on Tuesday 22nd September at 1pm?

Small business tips

**end of plug**

Direct Line for Business have recently started offering professional indemnity insurance as part of their package of small business insurance services, and they’ve put together this infographic, showing the real cost of bad advice to small businesses.

If you’re a small business, offering professional services, have you thought about professional indemnity insurance?


Do I need professional indemnity insurance

Produced in association with Direct Line for Business.




  1. 22 September, 2015 / 12:20 pm

    I have just been mentioning this to a few bloggers. My insurance is due for renewal, so I will give DL a ring for a quote

  2. 26 July, 2016 / 9:01 am

    You can add on your plan to hire a good adviser to help you sort out stuff.

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