Professional Indemnity insurance: an entrepreneur’s security

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Are you a professional entrepreneur with your own business? Do you own a business with other professionals working for you? Do you provide advice and other professional services to clients? Pay attention because the Professional Indemnity Insurance is a security need for your business.

 

What is the Professional Indemnity Insurance?
The Professional Indemnity Insurance is an insurance which is designed to protect professionals against certain risks arising out of the conduct of their business.

What kind of risks are we talking about?
It may happen that you provided your client with a misleading advice, you failed to provide a service properly or that you breached the conditions of your contract. Your client therefore decided to sue you for damages arising out of malpractice, negligence, breach of contract or other related grievances.

What does the Professional Indemnity Insurance cover?
Under your insurance, you will receive cover against the legal costs and claims for damages as contested by the client. As your insurer, we will step in to pay the legal fees of your attorney or legal representative and we will pay for the claims awarded by a court or as settled through arbitration with the client.

Who is considered as a professional?
A professional for the purpose of this type of insurance is considered as someone who practices a business in which they provide advice or a service to their clients. For example, doctors, lawyers, accountants, graphic designers, marketing consultants or any other similarly-related professions.

How do I know if I need the Professional Indemnity Insurance?
It all depends on the nature of your business. If your licensed business entails providing advice to clients, you may likely need one. A person can sue you for providing advice which resulted in monetary loss on their part or any other negligent advice which may have caused harm to come to them. If you have a signed contact with someone, you may likely need a Professional Indemnity Insurance. If you read a contract carefully, the ‘indemnity’ clause indicates how liability is decided. In fact, nowadays a client might insist that you get one as a guarantee for them as much as it is a protection for you. Clients might consider your professional business as more sound if they are comforted in the knowledge that there are mechanisms in place to recover from unforeseen losses in case there is a breach of contract.

For more information on Professional Indemnity Insurance, call us on 429 5114.

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