Professional Indemnity Insurance
2018 01 25
Professional Indemnity Insurance is there to provide you with financial and legal support if a claim is made against you or your business. Generally, this type of insurance is needed by companies which create designs for clients or offer advice and services as part of their business. If your services are deemed ‘inadequate’, then you could be facing repercussions.
Professional Indemnity Insurance is designed to protect you from claims, alleging you have made an error with your service, given false or partial information to a client or third party or have given inadequate advice, services or designs. These claims can be made against an individual or the business itself.
What does it protect against?
This type of business insurance protects against allegations of poor conduct and/or services provided. In this case legal proceeding may avail; financial support and advice will likely be needed, therefore this type of business insurance is at hand to help support you.
Professional Indemnity Insurance’s main purpose is to provide support and advice if the public or a third party is displeased with the service you have provided. Unlike other types of business insurance, which concerns themselves with goods and products, this type of insurance deals in time and advice. A physical product may not have been provided and thus it is your time and integrity which may need protection.
How can it support you and your employee(s)?
If a client makes allegations against you or an employee, then due to the nature of verbal (or written) subjective complaints, a series of actions may need to be taken. The severity will likely dictate the course you take. If the allegations are slanderous, then perhaps no legal proceedings will need to be carried out. However, if the allegations could be perceived as correct, and there has been an inadequate service provided, it could have detrimental effects on your reputation.
In some cases, a settlement may be the resolution. This maybe monetary or it may result in more time on a project in order to rectify the issue. Either way, it could create a loss for you. This may be the time in which you need to call upon your insurance policy and use the financial safety net.
What can it do in regards to your business?
It could do many things to protect your business. First a foremost it could help save your reputation, which in many cases is your life line. You do not want one employee mistake to ruin all the hard work that has gotten you to where you are now. Secondly, it can be a great financial help if a settlement has to be made or in the worst case scenario, if legal proceedings are to go ahead.
Professional Indemnity Insurance is also like any other business insurance you may take out. It is a resource in many ways: it is an assurance, that you can call upon the advice of experts in their field, so that you get the best possible result.
Frequently Asked Questions
What types of companies need Professional Indemnity Insurance?
Generally, businesses that provide advice such as debt and money advisors, legal advisors etc. will need this type of insurance as it protects against claims of an inadequate service. This branches out to other service providers, such as interior designers, architects, wedding/party planners, psychiatrists and other kinds of therapists, estate or lettings agencies, storage providers, various consulting firms etc. The list could go on and on. If you need to query if this type of insurance is suitable for your business needs, then consult a reputable insurance company.
Can this type of insurance be combined with others?
Like many business insurance policies, they can be made up of a myriad of facets, to suit the needs of your company. In order to get the correct coverage and the best possible price for the coverage you need, you are best to discuss with an insurance broker. They will be able to offer you advice and ensure you get the exact coverage you need.
How do I know if I need this insurance?
As stated above, if you provide designs, advice or a service then it is likely that you should need this insurance. However, if that seems ambiguous and you would like further advice, contact a trustworthy business insurance company to discuss your company and they will be able to point you in the right direction.
How do I know if I already have this insurance in my policy?
Your insurance provider hopefully will have notified you of all that is included within your policy. If you are unsure then check your policy documents and check for a mention of professional indemnity or professional liability protection. If you are still unsure then contact your insurance provider and have them review your policy. They will be able to let you know if you have taken out this type of business insurance or not. If you haven’t got it included but you would like to, then again express this with your insurance provider and they should be able to make amendments. Please note, your insurance premium may go up if you decide to add additional protection.