Professional Indemnity Insurance - needed or not?

Question

Hi.  I’ve created my first course, it has been submitted for review which came back with a few minor changes. Hopefully it is fine to be published now.

My big question is if I should get Professional Indemnity Insurance - to protect myself against any possible claims.  I’ve created the course as a personal endeavour, not part of a company.

Should I be creating a company?

I’d welcome views and guidance please on what others might have done to protect against litigation? Or am I being over cautious?

Kind Regards

Peter

AHardin · Answer

Thanks for posting this because it was my reminder to put out quotes for cyber liability insurance today. 😊

As for your question, whether you need it depends on your risk appetite and exposure. Certain topics are riskier than others, and so are certain business activities.

A $1 million professional liability/E&O policy isn't that expensive (you may not even need that high…some go as low as  $250k annually), and it's a good safety blanket to have. But, from a business perspective, does it make sense? What topic does your course cover? What risk does it put you in for being sued? Do you personally store PII or just sell in marketplaces like Udemy? These are some questions to consider.

Also, insurance providers may want you to be a formal business structure, such as an LLC, which comes with additional costs.

Ever since I formed my LLC, I've carried E&O and GL insurance, but for the 6+ years prior, when I taught on the side as a sole prop, I didn't…but my policy is retroactive all the way back to when I started my business activities, so I'm protected even before I started my LLC (but it cost more). And, like Frank, I've luckily never had to use it.

PeterWood · Answer

Hey Frank, great to hear from you - I’ve been a student of your amazing courses for a long time 😁

I started my course as a personal goal to help my university mentees, but it’s grown into a full course now.

Thanks so much for the advice.  I’ll take a look into that.  Insurance seems to be more complex because of the international customer base.

Thanks once again for the insights.

FrankKane · Answer

I've always had insurance (I'm set up as a business) but never had to use it.

Worth a talk with your insurance agent. A personal umbrella policy might cover you. Whether it's worth it depends on what you're teaching (like, skydiving might be more risky than painting) and how much you have to lose.