Professional indemnity insurance

 

Professional indemnity insurance covers experts who offer advice or services to other companies or individuals. This form of insurance may help pay any defense costs incurred as a result of potential damages claims if you make a mistake in this advice or service.

Why you should consider professional indemnity insurance:

Despite their best efforts, no individual – or company – is immune to making mistakes. As a result, several professional organizations require or recommend that practitioners have industry-specific professional indemnity insurance.

So, what's the worst thing that could happen? The following are some examples of common breaches of duty and professional errors:

·        When a graphic designer generates content that is identical to a copyrighted design, which leads to legal action.

·        An accountant performing an improper audit of a customer's account, resulting in a penalty and financial loss for the client.

·        Due to an unintentional omission in the provision of professional guidance, a vital deadline was missed.

Professional Indemnity insurance protects your company financially in the event that a claim is brought against you or your company. A Professional Indemnity insurance claim's expense, not to mention the time involved, can have a substantial impact on your organization.

Professional Indemnity insurance can protect you from things like legal fees, time away from your business, and the potential impact on your company's reputation. It's an investment in the long-term viability of your professional business, which is something that all small business owners strive for.

What does professional indemnity insurance cover?

Professional indemnity insurance protects your company from claims originating from (alleged or actual) negligent acts or omissions made while delivering professional services and advice. Compensation, legal fees, and investigation charges are all covered under your policy.

Typically, professional indemnity insurance can financially cover:

·        Breach of duty allegations, including breaches of confidentiality and fiduciary obligation, as well as professional duties that have been neglected.

·        Damages caused by employees' dishonesty and negligence.

·        Breach of fair-trading laws and violations of trade practices.

·        Defamation claims originating from professional advice or services.

·        Public relations expenses help you to protect your business reputation.

Professional Indemnity claims can arise from simple things like:

·        diagnosis or treatment that is erroneous

·        providing false guidance

·        an error in judgment

·        an act, negligence, or failure to perform a responsibility

·        Documentation loss

·        accidentally slandering someone

·        failing to match your customer’s expectations

 

Professional indemnity insurance exclusions:

Exclusions should be understood by all professions so that they know what they aren't insured for. Typically, insurance policies do not cover claims resulting from the following:

·        Illegal activity.

·        Any asbestos-related claim.

·        Intentional damage is defined as any act, error, or omission by an insured professional that causes loss, injury, or damage to a third party with the intent or ability to reasonably anticipate such loss, injury, or damage.

·        Damages for exceptional and punitive purposes.

·        Employee injuries sustained while working or performing the duties of your business.

·        Public liability claims.

How much does Professional Indemnity insurance cost?

Every business is unique, the cost of your insurance will be influenced by the industry you operate in and the services you provide.

Some professions, such as real estate agents and accountants, are required by law to have a specified amount of Professional Indemnity insurance coverage. Other professionals may be required to carry a certain level of Professional Indemnity insurance as part of a contract.

It's critical to have the correct level of Professional Indemnity insurance to safeguard your business' money and reputation, regardless of what industry you're in or how big your company is. Your broker can assist you in determining how much it will cost.

What you’ll need to include in your policy quote:

Have the below details handy when completing a quote?

·        Contact details

·        Business details (e.g., the total number of employees)

·        Financial information (e.g., annual revenue)

·        Information about any previous claims.

The amount of professional indemnity insurance you'll need depends on your sort of business and its services. As a result, while generating a quote and acquiring coverage, it's critical to supply as much information as possible about your company.

Also, tell your potential insurance about any previous complaints or claims made against you. Even if you're unsure, it's best to include as much information as possible, as any omissions of previous claims (whether deliberate or not) might invalidate or limit your coverage.

 

What’s the difference between Professional Indemnity and Public Liability insurance?

Both Professional Indemnity and Public Liabilityinsurance protect your company from third-party claims arising from liabilities arising from its operations.

The main distinction is that Public Liability insurance protects you against personal harm and property damage, whereas Professional Indemnity protects you from being sued for the professional services you provide to clients.

If you have a current Professional Indemnity insurance coverage, you are covered for any claims filed, regardless of when the professional service was done.

A Public Liability insurance policy, on the other hand, would cover you if the alleged incident occurred while the policy was in effect, even if the claim was filed after the policy had expired.