Professional indemnity insurance is a form of cover which is absolutely necessary for every professional business. Not having this type of insurance can mean…
Professional indemnity insurance is a form of cover which is absolutely necessary for every professional business. Not having this type of insurance can mean leaving yourself open for many potential legal costs in the event a claim is brought against you, regardless of if you were at fault or not.
What are we talking about?
Professional indemnity insurance protects your business in the event that a client suffers a loss due to the professional services supplied by yourself. It is very similar to public liability insurance, where you are covered for your physical actions, however professional indemnity covers non-physical aspects instead.
A policy for professional indemnity insurance covers you for any alleged negligence or breaches of duty due to your error, omission, advice, or performance of your professional service. The cover includes payment of your own legal costs as well as that of your clients.
It’s important to note that if a client makes claims against you, regardless of their validity, you must either pay or defend against these matters. Professional Indemnity Insurance covers the Insured for the legal defense costs in the event of a claim being made.
Do I need this cover?
In the past, professional indemnity insurance was only generally used by doctors, solicitors, or accountants. However over the past decade the trend has changed as there is a vast range of professionals needing this type of insurance.
You would over yourself with professional indemnity insurance if you are providing a service or advice as a skilled professional. For example if you are skilled in IT, engineering, brokering, or a health practitioner such as a midwife or nurse. In general, where you are charging a fee for your advice of professional service there is a Professional Indemnity exposure. If you breach your professional duty resulting in a loss to the client, you can find yourself liable for this loss and will need the insurance.
What is the bottom dollar?
Depending on your professional business, the costs of professional indemnity insurance can vary dramatically. A consultant for example, operating as a single trader, the cost can be as little as $500, however for a large national company it can step into the hundreds of thousands.
At Elliott Insurance Brokers, we can help you decide on the type of cover you need and tailor it to your business needs. From price competitive and quick cover online through to large complex risks handled by our Special Risks Division, Elliott Insurance Brokers has a solution for all Professionals.
