Does your business provide advice, specifications or instructions as part of your work? If so, you may want to consider professional indemnity insurance to protect you and your business against possible claims for negligence.
What is professional indemnity insurance?
Professional indemnity insurance is a type of cover to protect your business if you provide advice, specifications or instructions as part of your job.
Professional Indemnity Insurance provides cover is respect of any claims of Negligence that may be made against you or your business arising from any professional advice/services/ errors or omissions you may be alleged to have made. Professional Indemnity provides cover in respect of the claim being made against you and also in respect of the cost associated with defending and such claim for negligence.
Do you need professional indemnity insurance?
Professional indemnity insurance is vital for many business types, from consultants and accountants to designers and recruiters. It may be required by those who are self-employed or by a company doing certain types of work.
Businesses that might benefit from professional indemnity insurance are those that:
- Advise clients
- Offer a professional service
- Handle client data or intellectual property
What does professional indemnity insurance cover?
This type of insurance covers the cost of mistakes made when providing professional services. In today’s business world, anyone is at risk of making a mistake no matter how diligent or experienced they may be.
Some errors are minor with little or no consequence or financial cost. However, other situations can be much more severe and not having adequate insurance cover can financially ruin a company, its directors and its reputation.
Depending on the policy purchased, professional indemnity insurance will generally cover:
- Breach of duty
- Civil liability
- Errors and omissions
- Legal costs incurred in defending any such claim
Some policies will also offer protection for business or financial loss caused by defamation, loss of paperwork, conduct of employees and unintentional breach of confidence.
In addition to this, the insurance will often cover any potential infringement of intellectual property rights or copyright, which is very beneficial protection for businesses in the creative industries sector.
4 reasons you need professional indemnity insurance for your business
- Having an insurance policy covering professionals for their work is essential because it allows them to offer services with peace of mind that any potential additional cost of mistakes is covered.
- A professional indemnity policy can also cover both the legal costs and expenses that could be incurred because of a legal case being made against a professional.
- Without this insurance, professionals are exposed to much more business risk and may need to increase their prices to account for it. With this insurance cover, you are protected against many ‘worst-case scenarios’ and can operate more competitively as a result.
- Professional indemnity insurance is not a legal requirement. However, most professional institutes and associations require their members to have some form of appropriate cover and regulate this through their rules and regulations. Not having this type of insurance can result in a serious disciplinary offence resulting in a firm being fined or closed by its regulator.
How much does professional indemnity insurance cost?
Insurers will set your premiums for professional indemnity insurance based on the following factors:
Size and type of business: Bigger businesses generally have more risk when it comes to financial and reputational losses. These corporations will typically need higher levels of cover if their clients are big companies.
Nature of the work you do: If your business faces high levels of risk, then your insurance premium is likely to increase.
Business insurance comparison: As an insurance broker, BMIB will compare quotes from multiple insurers to get you the best possible business insurance quote and advice.
Protect your business and enjoy peace of mind today. Contact our team for a free, no-obligation quote. Alternatively, call 071 91 41030.