Guide to Professional Indemnity Insurance

Date Added: Dec 7, 2011
Author: Dean Smith
Category: Business: Insurance Other

We are living in a litigious world, and because of this having professional indemnity insurance is should be considered more of a necessity than a luxury.  Most business owners should find what the risks are to their business and whether is of benefit for you. This article helps by providing the key points regarding professional indemnity insurance so spending a little time reading now could save you a lot of time, hassle and expense later. 

Professional indemnity insurance protects you, a business owner if you make some sort of professional error.  The insurance is commonly referred to as “errors and omissions insurance”. Whether you are a graphic designer or an engineering consultant or anything else for that matter, as a business owner you could find yourself in a situation where a client wants compensating for something they deem to be your fault.  In this situation unless you have insurance you could find yourself having to provide defence costs and compensation from your own pocket.  Professional Indemnity insurance covers you and provides financial protection if a client becomes dissatisfied and wants to take matters further.

Most business owners could benefit from having this kind of cover, however it is particularly worthwhile for those with an advisory role.   If you give advice which others rely on this makes this a particularly important cover to have.  Anyone responsible for data and client information may consider it to be important too.   An estate agent who misses a diary for exchange of contracts could be held responsible.   An IT consultancy who receives a complaint that a client's business has suffered due to a technical website error would also require this kind of insurance. There are many of scenarios that make professional indemnity insurance extremely worthwhile for many businesses.

If you work in a profession where the degree of competency be questioned at any time you should think about taking out professional indemnity insurance. If there is any possible scenario where an error of lack of judgment on your part could result in a serious problem for your client then it may be better to be on the safe side. The insurance provides financial support if you were ever to find yourself embroiled in a legal battle for compensation.   If the insurance is not in place then there could be serious financial consequences if you are accused of negligence, misuse of intellectual property or you lose data. There are a host of other mistakes that could be made that would result in legal action against you in certain professions. Without financial aid in the form of insurance it could be enough to send your business under and a complete loss of your livelihood and your business.

If you are interested in taking out this kind of insurance then you should seek help and advice from us. There are a variety of policy options available.  It can be confusing to try and research this yourself and usually best to talk to a professional qualified advisor.

Dont forget the other types of insurance you will need too such as liability insurance or directors and officers insurance for Limited companies.

 




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