Business Adviser Professional Indemnity Insurance

We all make mistakes. But are you covered in case a client makes a claim against you for financial losses they have incurred through advice you have given them?

The Institute of Business Advisers – working closely with our brokers Towergate Professional Risks and our insurers Royal & Sun Alliance – has devised a Professional Indemnity Insurance scheme to give you the peace of mind you need at an affordable price.

Cover starts from around £180 per year (for an AIBA) for £0.5m Professional Indemnity Insurance which includes £1m Public Liability cover.

Because the policy is designed specifically for the business adviser who is working with small and medium sized businesses, and because we have spent years representing needs of business advisers, the Instutite of Business Advisers scheme can provide you with the most appropriate cover whilst keeping the costs to our members as low as possible.

Please scroll down to read the information below or jump to the section you need by clicking from this list:-
1. Policy Details
2. Premiums
3. Notes on Premiums and Payment
4. Summary of Insurance Cover
5. Business Advisory Services- Inclusions in the Policy
6. Business Consultancy Services (included in the policy for all Associates, Members and Fellows)
7. Specialised Consultancy Services – Exclusions from the IBA Policy
8. Business Support Services for SMEs – Definitions for Cover by the IBA Policy
9. Professional Indemnity Insurance Summary of Cover

How to get low cost Professional Indemnity Insurance

The Institute of Business Advisers Professional Indemnity Insurance Policy is available to all IBA members. (See the table below for prices). You need to join the IBA (application fee £65 plus annual subscription £145) to get cover under the scheme. First you need visit the “How to join” section of the site and read about how to join, you can send off for an enquiry pack and download a membership application form from there.

If you want details of prices or a copy of the Professional Indemnity Insurance Policy please contact our brokers Towergate Professional Risks, 31 Clarendon Road, Leeds, LS2 9PA. Tel: 0113-294-4000 Fax: 0113-294-4101
e-mail: who will be happy to answer any questions you may have. They will send you the proposal form for you to complete.

You cannot get an accurate quote before you know what grade of IBA membership you have been offered so please ensure that you send off your application to join the IBA before completing the Professional Indemnity Insurance proposal documents.

Once you have successfully applied to join the IBA you will be able to take out cover immediately which will be effective from your date of joining. Because the policy is retrospective you will then be covered for any claims made against you for any work you have done in the previous years working as an adviser.

It is vitally important to ensure you have adequate cover, in fact some organisations insist on seeing your proof of Professional Indemnity Insurance before they will consider giving you any work

You do not have to be covered under the Institute of Business Adviser Professional Indemnity Insurance scheme to be a member but if you take out cover from another insurer we will ask you for a copy of the certificate as proof of cover when you apply to join the IBA.

Payment for our insurance policy must be made direct to the brokers separately to your Membership Subcription payment which should be sent to the IBA. The price for the policy will depend on the date of your joining the Institute of Business Adviser as all policies expire on 31st March each year. So if you join the IBA in September for example, you would only pay for half the year’s Professional Indemnity Insurance. All Policies have to be renewed on 1st April each year.

To apply to join the IBA you can download an application form from this website, or click on the Application Pack Request form on the main menu.

All Associates, Members and Fellows are required to undertake that whilst practising they will be covered by adequate professional indemnity insurance – either collectively through a Business Support Organisation Policy, or individually through the IBA Members’ Professional Indemnity Insurance Policy or an equivalent independent policy. It is not a requirement that Affiliates have Professional Indemnity Insurance cover but they are eligible for the IBA policy.

It is recommended that retired members arrange run-off cover – see below.

Premiums for Year Commencing 1st April 2006 (Including Insurance Premium Tax at 5%)

1. Policy Details

Limits of Indemnity Fee Scales
Scale A Scale B Scale C
Professional Indemnity £500,000 £1,000,000 £2,000,000
Public Liability £1,000,000 £2,000,000 £5,000,000
2. Premiums

Membership Grade Premium
Scale A B C
Affiliates £240.00 £315.00 N/A
Associates (AIBA) £180.00 £235.00 £307.50
Members (MIBA) £130.00 £179.00 £245.00
Fellows (FIBA) £99.00 £125.00 £145.00
Retired members Run-off £225.00 £340.00 £445.00*

3. Notes on Premiums and Payment

The Current Policy Year runs for 12 months from 1st April 2006 to 31st March 2007. If you are new to the scheme it is possible to join at any time throughout the year. For those already insured under the Scheme the full premium applies whenever you renew.
New IBA members and existing Affiliates, Associates, Members & Fellows not previously insured:- Pro-rata using the number of days left in the year divided by 365 multiplied by the premium.
Existing insured members:- renewal premiums as above apply according to current grade irrespective of date of renewal.
Existing insured members wishing to increase level of indemnity:- Pro-rata based on the number of days left in the year.
Retired Members: If, during the period 1st April 2006 to 31st March 2007, you become a Retired Member of IBA and were insured under the Scheme during 2005/2006, you should take out run-off Cover in respect of claims arising from your previous Business Advisory Services. The above premiums provide Indemnity for a 5-year period from the renewal date. If you cease membership or terminate cover for any other reason please contact the Brokers for advice on Run-off Cover. (See p4 Item g.)
UK & Ireland only. The above premiums apply only to members who are resident in the UK and Ireland. Residents of other countries cannot be covered.
Payment should be made by either Cheque or Bankers Draft payable to Towergate Professional Risks
Commencement Date. Indemnity will not be operative until your Proposal /Renewal Form has been accepted, your payment has cleared and an Insurance Certificate has been issued. Completion of the form does not guarantee acceptance.
Premiums are collected by the Broker Towergate, no warranty is given and no liability whatsoever is assumed by the Institute or its subsidiary company or sub-contractors.

4. Summary of Insurance Cover

(Through Royal & Sun Alliance Insurance Company) The IBA Members’ Policy offers indemnity against liability at law for damages and claimants’ costs and expenses in respect of claims arising out of the provision of Business Support Services for SMEs. Whilst the Policy is designed to provide indemnity solely for individual members of IBA, the Insurers will provide full cover for a Partnership or Limited Company on the strict understanding that the member is in effect the ‘company’, with no non-member Partners, Directors or employees involved in providing Advisery services. In any Companies or Partnerships with more than one working Business Adviser, each must be an IBA member paying an individual subscription and PII premium according to grade to ensure full cover.

The Indemnity will cover: Breach of professional duty; Dishonesty – subject to exclusions; Libel and Slander; Loss of or damage to documents; Compensation for Court Attendance; Public & Products Liability and Legal Defence Costs as defined in Summary of Cover.

5. Business Advisory Services- Inclusions in the Policy

The following job titles and project names for UK business support services for SMEs are normally included in the policy:

Job Titles Project Names
Business Adviser Accreditation of Business Advisers, Counsellors & Mentors
Business Counsellor Assessment of Business Advisers, Counsellors & Mentors
Business Development Counsellor Assessors & Verifiers of SFLB Business Support NVQs
Business Mentor Benchmarking
Business Tutor Business Diagnostic Services
Career Counsellor Business Health Checks
Design Counsellor Business Planning Advisory Services
Enterprise Adviser Economic Development Teams
Enterprise Counsellor Investors in People
Export Adviser/Counsellor Monitoring of Business Advisers, Counsellors & Mentors
Innovation & Technology Counsellor Sources of Finance for SMEs – sign-posting only
Personal Business Adviser Training Programmes for Business Advisers etc.
Personal Business Counsellor Training Programmes for SMEs

6. Business Consultancy Services (included in the policy for AIBA, MIBA & FIBA only)

The Policy covers “Business Consultancy Services” such as these examples – but not “technical” consultancy such as accounting, computing, finance, scientific or other technological services.

Job Titles Typical Activities
Business Consultant Business Planning Marketing Strategy
Management Consultant Cash Flow Forecasting Performance Improvement
Marketing Consultant Company Start-up Guidance Production Planning
Non-executive Chairman (non-voting) Feasibility Studies Public Relations
Quality Consultant Funding Appraisals (not approvals of)
Grant-Finding Service Strategic Planning

7. Specialised Consultancy Services – Exclusions from the IBA Policy

The following positions, for example, are excluded from the IBA Professional Indemnity Insurance Policy as they are considered to be “specialised” consultancy services which should be covered by a specific PI Insurance Policy – often arranged in conjunction with another professional Institute or regulatory body:

Accountancy & Book-keeping Computer Training ( design) Information Technology Project Management
Business Angel Engineering Consultant Interim Manager Scientific Consultant
Company Director Events Organiser Investment Fund Manager Shadow Director
Computer Consultant (incl. website design etc.) Financial Consultant Non-Executive Director Technology Consultant

8. Business Support Services for SMEs – Definitions for Cover by the IBA Policy

Business Advice is the provision of independent, impartial and confidential information and guidance to potential and established businesses, based upon substantial business experience and current knowledge of related factors, so that Clients may learn and benefit from that advice in their subsequent actions.

Business Counselling is a process by which business problems are diagnosed and resolved in such a way that Clients learn not only how to overcome their current difficulties, or exploit their opportunities, but also how to tackle similar situations in the future. It is a process in which a Business Adviser works “through and with” rather than “for” a Client. As a result Clients come to “own” both the problem and the solution and they are motivated to set objectives and take action.

Business Mentoring is an on-going long-term business counselling relationship between an experienced Business Adviser and a Client which covers a diverse range of topics as a business develops towards an agreed set of objectives.

Training for Owners, Managers and Directors of small firms is a group activity focusing on specific aspects of the management spectrum led by a qualified and experienced Business Adviser.

Business Consultancy Services embrace a broader range of general management support activities in which the Business Adviser is providing specific research, investigations, assessments, reports, recommendations and implementation guidance for a Client.

Small & Medium-sized Enterprises are defined in accordance with the Companies Act and DTI guidelines as businesses with less than 250 employees, a Turnover of less than £11.2mn or a Balance Sheet maximum of £5.6mn and based in the UK or Ireland.

9. Professional Indemnity Insurance Summary of Cover

The Insurers and the Institute have, together with our Brokers Towergate Professional Risks, rationalised the cover conditions, premium scales, documentation and administration. The cover and exclusions are unaltered except where they have been improved for the benefit of members.

Professional Indemnity Section
Summary of Cover: Indemnity to individual members of IBA against liability at law for damages, claimants’ costs and expenses, in respect of claims notified during the Period of Insurance arising out of the conduct of Business Advisory Services, covering:

Breach of professional duty by reason of any neglect error or omission occurring or committed in good faith.
Dishonesty of any employee or agent.
Loss of or damage to Documents.
Compensation for court attendance.
Libel and Slander committed in good faith.
Public/Products Liability Section
Summary of Cover: An indemnity to individual members of IBA against liability at law in respect of Accidental Injury of any person or Accidental loss of or damage to property for damages, claimants’ costs and expenses arising out of the conduct of Business Advisery Services, including:

Cross Liabilities
Overseas Personal Liability
Data Protection
Costs of legal representation
Compensation for court attendance
Contingent Motor Liability
Products supplied
Limits of Indemnity for any One Claim: Scale A or Scale B or Scale C Professional Indemnity: £500,000 £1,000,000 £2,000,000 Public Liability: £1,000,000 £2,000,000 £5,000,000
For claims arising from products supplied or in respect of sudden and accidental pollution or contamination, the chosen limit applies to all claims in any one year of insurance. (All claims attributable to the same act, error or omission or series of acts, errors or omissions consequent upon or attributable to the same original cause or source will be regarded as one claim.)

Legal Defence Costs Covered
In addition to the above limit, the insurers will cover pre-approved legal costs for defending claims under the policy without limit.

Main Exclusions
Any liability arising out of death, disease, illness or bodily injury to an employee. Any claim arising from breach of any obligation to employees, past, present or potential. (If you have employees, the Law requires that you have Employer’s Liability Insurance. Our Brokers can arrange this at reasonable cost – contact details in Section g below.)
Any claim arising out of work undertaken for any business in which the insured has a controlling interest or holds an executive role or a position able to make a major policy decision on behalf of such business.
Any liability arising out of any system failing to recognise or utilise any data concerning dates whether year 2000 or otherwise.

Claims Arising from Prior Activities
The IBA Professional Indemnity Insurance scheme operates on a “claims made” basis so that cover is provided for current new claims arising from prior years’ activities provided that they are within the scope of cover of this policy. Conversely claims arising next year from work undertaken during this year or prior years are not covered unless the policy is renewed promptly or “run-off” cover is taken out.

Technical Queries
Any members having technical queries on this Policy or any potential claim should contact our Brokers, Towergate Professional Risks, 31 Clarendon Road, Leeds, LS2 9PA. Tel: 0113-294-4000 Fax: 0113-294-4101 e-mail:

In the event of any dispute between the Insured and the Insurance Company as to whether activities which have led to a claim are “Business Consultancy Services for SMEs”, such dispute shall be referred for arbitration to the Chairman or Chief Executive of the Institute of Business Advisers, whose decision shall be binding on both parties.

Special Note
The above is a Summary of Cover only. The indemnity provided relates solely to individual IBA members’ activities as a Business Adviser and Consultant, as described at the beginning of this document. This Information Sheet has been compiled by IBA for the guidance of existing and potential members. It does not form any part of the insurance “contract”. Reference should be made to the Royal & Sun Alliance Insurance Company Policy No 37A/SA11000512 for the authoritative wording. A full copy of the policy wording is available on request from Towergate Professional Risks.