Professional Indemnity insurance is intended for the providers of professional services who wish to protect themselves from compensation claims. Solicitors, architects, accountants and many other professionals offer their services and advice to clients. Experienced professionals trust their skills but mistakes do happen. If you were to err on a job there is a possibility that your client could face financial loss and as a result, you may be held liable for that loss as the client is relying on your professional services. To avoid being caught unaware, Indemnity Insure will guide you on what you should do.
How does professional Indemnity Insurance help?
Professional Indemnity insurance is useful for protecting one from claims filed by clients who have suffered loss as a result of failures in the professional services rendered. The ‘business injury’ may result in huge compensation claims and the costs of defending such a claim can be huge so your Professional Indemnity policy should provide protection against both the compensation and legal costs both for yourself and for your client.
If going to court is inevitable and your employee or business is accused wrongfully, this insurance policy will enable you to employ various expert defence attorneys to ensure that you win the suit. You will get legal liability protection. The main reason as to why many owners of businesses deem Professional Indemnity Insurance to be very expensive is due to the fact that it has to be renewed every year whether used for legal costs or not. This is just a small price considering the alternative. The insurance premium costs are very little compared to the huge court battle, payment of claims and out of court settlements.
Should it be a legal requirement?
Many professional bodies make it compulsory to have Professional Indemnity cover but some professions such as financial advisors and accountants may not legally operate a business unless they are covered by Professional Indemnity cover.
You will find that many prospective clients will insist that you are adequately covered by professional Indemnity insurance and if you are not they may well take their business elsewhere. This could cause you to lose those important large contracts.
Besides all the major concerns, Professional Indemnity Insurance is ideal for professionals who offer advice and services. Although it is not possible to protect your business against all possible failures, one can safeguard it against the costs associated with the failure.
How a claim should be avoided
Even though you have Professional Indemnity insurance it is still important to do all in your power to avoid claims being made against you. The first line of defines is a well drafted and watertight contract between yourself and your client. Professional Indemnity Insurance (UK) will help you have well-articulated arrangements with clients with no ambiguous clauses so that claims can be avoided as both parties have a good understanding of the requirements. It is also crucial for one to keep detailed records concerning your contracts and the work undertaken for each client. In the event of a claim being lodged, these records will be vitally important in rapidly settling the dispute.