A lot of people know about Professional Indemnity Insurance but don’t think it applies to them. After all, if you’re careful, you don’t need it do you? Unfortunately, no matter how careful you are, you could find yourself in a situation where a client decides to take legal action against you after suffering financial loss.
In a recent high profile example, pop star Rhianna won a $10 million settlement after her accountant gave her bad advice which reportedly resulted in her squandering a massive $9 million in one year. Rhianna alleged that her accountant advised her to make a string of bad financial decisions which left her effectively bankrupt at the end of 2009.
Now, you may not be Rhianna, but this is extreme example shows how easy it is for legal action to occur if a client decides to take action.
Do I Need Professional Indemnity Insurance?
If you offer advice or a service for a fee as part of your job, you need to consider Professional Indemnity Insurance. Professionals such as lawyers, accountants and doctors must always ensure they have proper indemnity insurance in place as they are open to any number of claims over their professional life. However, the courts are now taking a broader view of what constitutes a professional and have now expanded to less likely professions such as funeral directors and pest controllers. If you’re in doubt, speak to your insurance broker. It’s better to speak check rather than failing to be appropriately insured and leaving yourself open.
Professional Indemnity Insurance offers protection for professionals who have had claims made against them accusing them of damages to a third party which have occurred as a result of an act, omission, or breach of professional duty. It will cover the legal costs associated with the claim as well as any compensation required to be paid following a successful claim. Indemnity insurance offers you a safety net which means you don’t need to shoulder the costs yourself.
Remember, even if a claim made by a client is unsuccessful, you may still be facing significant legal costs after hiring someone to represent you. If it’s a lengthy case, the legal costs may be devastating financially and you may simply not be able to afford good legal representation.
Offering You Peace of Mind
Professional Indemnity Insurance is vital for any profession who provides a service or advice for a living. Although you may never be in a situation where a client makes a claim against you, the unexpected can happen no matter how careful you are and indemnity insurance will offer you peace of mind that you’ll be covered financially if this occurs. If you’re unsure whether you’re in a profession which requires Professional Indemnity Insurance, speak with your insurance broker today.
If you have any further questions about Professional Indemnity Insurance or would like a quote, contact Elliott Insurance Brokers on 1300 635 315 today and we would be more than happy to help.
