Professional Indemnity Insurance
What is Professional Indemnity Insurance? This vital safeguard, also known as PI insurance, is designed specifically for professionals who provide advisory or service-oriented expertise to their clients. In some instances, it’s not just a wise choice but a regulatory requirement for certain professions. Professional Indemnity insurance steps in to protect your interests when claims are made against your business by clients or other parties, alleging that your professional services have caused them financial harm.
But it doesn’t stop there. PI insurance also extends its shield to cover the costs associated with legal proceedings, settlements, court orders, or judgments tied to claims against your business, as long as they fall within the policy’s protective scope.
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Crucial Coverage Areas of Professional Indemnity Insurance
Claims Investigation Expenses: This facet of PI insurance takes care of the financial burden associated with investigating, defending, and ultimately resolving claims brought against your business.
Public Relations Costs: PI insurance also includes coverage for hiring a public relations consultant to help mitigate any reputational damage in the aftermath of a claim against your business.
Contractor Protection: PI policies can encompass claims related to the professional services provided by consultants, contractors, subcontractors, or agents working on your behalf, for which you are legally responsible.
Public and Products Liability: In addition, Professional Indemnity Insurance can incorporate coverage for Public and Products Liability, which proves invaluable when a third party sustains injury or property damage due to products distributed or sold by your business.
Retroactive and Run-off Coverage: This important feature of PI Insurance extends protection to cover claims stemming from past acts, errors, or omissions, even those occurring before your insurance policy’s start date. It can also continue to safeguard you after retirement or leaving the profession for incidents preceding your departure.
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A Professional Indemnity policy is rated based on the industry the business participates in. Additionally, the limit of indemnity required, and the claims history (if any) of the applicant. The rate will always be based on the amount of risk involved. The policyholder must understand that they are covered for errors they make, not intentional acts. So, an accountant that intentionally puts wrong information in the accounts of the client will not find protection from the Insurance company for the intentional act of cheating.
What is Professional Indemnity Insurance?
Professional indemnity is an insurance policy that is tailor made for businesses/professionals that provide services and advice to their customers. That is to say a claim can be brought against you for any damages suffered to a third party from your mistakes. For instance, this could occur while providing a service, breaches of contract or any breach of professional duty in the course of your business.
What is a professional service/business?
Professional Service/Businesses’ exist in many different industries. For example Accountants, Bookkeepers, Consultants & IT Professionals, plus Natural therapists, Dance Teachers, Yoga and Pilates instructors and many more. These professionals provide knowledge and expertise in the form of either advice or by performing duties on behalf of their client.
Why You Should Choose AUZi For Your Insurance
So, why do I need Professional Indemnity Insurance?
Any business that holds itself out to clients as a professional organisation is at risk of having an action brought against them. For instance, this could happen if something goes wrong with a service or product.
Moreover, if a Landscape Architect makes an error in the design of a garden, it could result in a claim being made against them to rectify the problem.
Errors happen, and when they do, insurance is needed to protect your business and livelihood. With most Professional Indemnity Policies, the Insurer will pay the defence expenses up to the limits of the policy. As a result, these costs alone can prove extremely damaging to your business if there is no cover in place.
Any business that provides a service or product should be aware that every prospect, customer or client can result in a lawsuit. Therefore, it only takes one award from the courts to put a company out of business.