Business Article - Professional Indemnity Insurance
Professional indemnity insurance is capable of providing an essential level of financial protection for a wide variety of different professionals and advisors. In the event that a client suffers some form of a financial loss as a direct result of an alleged error, some form of neglect or an omission, then Professional Indemnity insurance comes into play by meeting the cost of any damage payable, or any defending claims. Even the most professional of workers can run into a situation like this, so it is important to protect yourself even if you do not think it is likely that you will ever have to deal with a claim lodged against you by a dissatisfied client or customer.
Professional indemnity insurance is absolutely a must have insurance policy for any and all professional businesses and services. This includes a variety of professionals, including accountants, architects, brokers, computer consultants, credit card purchase providers, ecommerce, engineers, IFAs, online banking, miscellaneous classes, solicitors and surveyors. Without professional Indemnity Insurance, companies easily run the risk of being severely exposed to many very dangerous liabilities.
Any person who makes a living out of giving advice, designing or offering some other similar service on a professional level is going to be seen as an expert by his or her clients, and when being viewed as an expert, you will be held to a much higher standard than others who work within a specific industry. Because this is a time of increased and heightened consumer awareness, the average consumer will not hesitate to pursue a specific claim if they have any doubts that the service they received was completely up to par. So any consumer who feels like he or she has received a sub-standard level of service will more than likely pursue a claim. In modern times, the need for professional indemnity insurance as a protection for professionals has never been greater.
Some people look at the idea of professional indemnity insurance, as an overhead cost that is both unnecessary and expensive. However, many professionals know from experience that substantial claims can be produced by anyone, so everyone should strive to be protected. Court award amounts have risen sharply in price, and the financial security of your business can be easily threatened if you do not have professional indemnity insurance to protect yourself.
What is Professional Indemnity Insurance?
Have you been asked to buy professional indemnity insurance for yourself or your business, or has it been recommended for you to purchase it for yourself or your business? If you are still unclear about what professional indemnity insurance is or what it means to you, or exactly how it works in order to protect you and your business practice, you may have difficulty determining whether or not to actually make the leap. However, it is important that you eventually come to the realization that professional indemnity insurance, while a little costly in nature, was designed specifically to protect professionals from any claims that are made against them in order to ensure that their business remains in tact once the dust settles. Professional indemnity insurance is one of those investments which while being a little costly right off the bat, is absolutely necessary if you want to stay in business for a good long time, or if you want to just protect yourself in general from claims lodged by dissatisfied clients or customers. Everyone makes mistakes, and even if you are a hardworking individual who strives for perfection, misunderstandings and mistakes do arise, and protecting yourself before hand is absolutely imperative if you want to survive.
Professional indemnity insurance protects your business from claims made by apparently dissatisfied customers and clients. These claims can be crippling to your finances and damaging to your reputation. Companies can easily find themselves in a serious dispute with a client over a simple mistake or misunderstanding, and the best way to protect yourself from such a mistake coming back to seriously cripple your finances or destroy your reputation is simply to protect yourself using professional indemnity insurance. Your business could easily be exposed to some of the following areas, all of which could result in a claim made by one of your clients or customers.
- Negligence – This may include a breach of duty, a breach of care of negligence. This may also relate to a breach of confidentiality, a breach of normal rights, or statements that are negligent.
- Intellectual Property – This relates to infringing on another person's copyright, broadcasting right, trademark, or any other act of passing off. This includes both unintentional and intentional infringements. This also relates to the false attribution of authorship, and breach of intellectual property rights.
- Loss of Documents – Damaged, lost or stolen data that originally belonged to your client and that cannot be recovered.
- Loss of Data – Damaged, lost or stolen documents that originally belonged to your client and that cannot be recovered.
- Dishonesty – This relates to a liability that arises if your clients' money is ever stolen.
- Libel and Slander – This is especially important if a bad transaction with a client or customer results in your company receiving negative press. Your Indemnity insurance policy provider will strive to help you overcome this obstacle.
How Will Professional Indemnity Insurance Protect Your Business?
There are a number of different ways in which professional indemnity insurance can be utilized. This list is by no means exhaustive, and it is important to know that professional indemnity insurance protection is actually imperative if you want your professional business to survive for any amount of time.1 – Professional indemnity insurance coverage will cover you if a mistake is made in the professional services that you have provided, if those professional services have led to a dispute with a specific client. If the dispute between you and your client becomes complicated for any reason, your professional indemnity insurance provider will work to defend your claim, all the way through court if it is necessary. Even if it turns out that you lose, your professional indemnity insurance policy will still continue to cover you for any damages that are accrued or that you become liable for, though the amount that is covered actually depends on what level of coverage you have insured your business for.
2 – Your professional indemnity insurance policy will also be capable of covering whatever costs are involved with fixing a mistake that you have made, which will make it easier for you to avoid dealing with a larger claim being lodged against you. Fixing a simple problem before it becomes something larger truly is common sense, and there is no reason to avoid trying to fix a simple mistake to protect you in the long run. Your professional indemnity insurance policy will make it possible for all involved parties to completely avoid wasting resources and time through a long, drawn out process of litigation.
3 – You are also protected by your professional indemnity insurance policy if you should happen to lose, damage or destroy any data or documents in your care but that belonged to your client. Or if an employee in your company is involved in the theft of money belonging to a client, your professional indemnity insurance policy will also protect you.
These are not the only benefits that you will receive from professional indemnity insurance, including direct access to a staff that specializes in support claims, as well as advisors who understand your specific industry. You will also have access to legal help that will strive to defend you against a claim brought up in court. You will be avoiding large amounts of legal costs that your business would drown in if it weren't for the protection of your professional indemnity insurance. And your professional indemnity insurance provider will protect your bottom line and your reputation from start to finish.