Many professionals take the risk of working without professional indemnity insurance, but it can be harmful to themselves in case of a claim.
Businesses need to offer a great experience in order to earn repeat customers, generate more referrals and build up an excellent reputation within the industry.
But some things don't always go to plan: sometimes what you set out to do doesn't work for your client and this can harm your reputation and be costly to you and your business
In these cases professional indemnity insurance can cover costs like defending claims from unhappy clients who think they were not given good advice.
Does your business need professional indemnity?
Although not a legal requirement professional indemnity insurance is a requirement by some regulators, professional bodies and sector regulators.
There are various bodies that set out minimum insurance requirements - the Solicitors Regulation Authority, for example. Members of the Institute of Chartered Accountants in England and Wales also requires members to have cover.
In the wider business world professional indemnity should be sort by any business that offers advice to their clients.
The Business Protection Insurance Group says the largest number of professional indemnity claims come from people who say they haven't been given good advice.
Other professions such as management consultants, tutors, health practitioners, web and graphic designers should also consider professional indemnity insurance.
The Chartered Insurance Institute sums up the need for professional indemnity insurance. It says: “When professional people offer professional advice, they must exercise an adequate degree of skill and have enough information to make that advice reasonably safe to give. If they fail to do so they can be held liable for any loss or damage that results.”
What does professional indemnity insurance cover?
If a claim is made by a client, professional indemnity insurance can help pay for any legal costs incurred for defending and settling a claim.
In any business mistakes can happen, and the cost of defending claims can be expensive, which can result in financial pressure on your business. Covering you and your business with professional indemnity insurance can give you peace of mind.
There are many reasons to have professional indemnity insurance and it can be a requirement of your profession. For example, if you belong to an association with specific requirements or work with regulatory bodies that require PI coverage, make sure yours is compliant so as not to violate any agreements. You should also consider the potential for mistakes in contracts because they could cause financial loss or damage reputations.
Benefits of professional indemnity insurance
The benefits of having Professional Indemnity Insurance include protection against claims from third parties due to errors made in executing their contract/agreement; obtaining cover when no other type is available; being able pay legal expenses without going into bankruptcy during disputes over fees charged by lawyers who may represent them on cases.
Professional indemnity insurance FAQ's
For more information on how 'Professional Indemnity Insurance' can help your business.
Contact: Chris Meyer
Phone: 07854 380900