Professional Indemnity Insurance is a type of business insurance for companies that offer professional services or consultations to their clients. It covers legal fees and compensation payments when a business issued by its clients and customers for a mistake the company has made in rendering its services. The coverage offered by the insurance company primarily focuses on the failure of the work or service delivered by the company that has resulted in a financial loss for their client. Professional indemnity insurance also covers businesses for mistakes including unforeseen breaches of confidentiality, professional disregard, loss of data and documents, and issues of copyright.
It does not matter whether you have a cordial relationship with your clients; a mistake small or big may potentially ruin the business relationship between you. Thus it is very crucial to take up professional indemnity insurance for your business’ sake and protection of its reputation.
Besides the above, there are many more benefits that come with Professional Indemnity Insurance.
Advantages a Professional Indemnity cover offers:
With a plethora of benefits, professional indemnity insurance is becoming more and more popular among business owners these days. Here’s a list of the key advantages that it offers.
Regulatory obligations and requirement by clients
For some professions such as Lawyers and Doctors, having a Professional Indemnity cover is required by their respective regulatory bodies. In such cases, it is a mandatory requirement for a professional to have a PI cover.
In addition, most clients also require that their suppliers etc. have a professional indemnity cover before they hire them for any professional services. This is so that in case there is an error or omission by their supplier, they know that they will be financially reimbursed in case of a loss caused by the supplier of the services.
In short, having a PI cover is a requirement for some professions by law and for other professions, clients demand that their suppliers are covered.
Financial safety from lawsuits:
Financial losses from litigations can throw a wrench, in the otherwise smooth functioning of your business. But, if you are covered with this insurance, the defence cost including court costs, lawyer fees, cost of filing the legal documents and so on – are covered by the insurer. Typically, it acts as a financial shield to meet legal fallouts against claims and omission mistakes.
Increases trustworthiness of your business:
Professional indemnity insurance potentially enhances your reputation and goodwill. It gives your investors and clients the confidence that whatever services you are offering, if there are some errors, then professional indemnity insurance will provide the requisite coverage. As a reputed business owner, you are responsible for your services, and if you have invested in this insurance, you let your clients feel more confident and satisfied with doing business with you.
And above all, it gives peace of mind.
Performing consultation services with greater confidence and without stress brings great results. But if you are held liable for financial or even reputational loss because of your consultation then the whole situation puts a great burden on your business. Professional indemnity insurance, on the other hand, provides great help in such scenarios and tackles your stress by offering monetary help.
So, there you have it- the benefits you and your business will attain with the coverage of professional indemnity insurance.
But, to ensure that you get all the possible advantages and to make the most of your insurance coverage you must choose the right insurance provider. You should carefully consider the following when selecting a professional insurer.
- Consider the experience of the professional insurance provider. Make sure the insurer you choose can provide the right coverage for your kind and size of business.
- Check the credit rating of the provider which will indicate whether the provider will pay valid claims.
- Check the claims servicing department to see if they have reasonable TATs for claim payments.
- Verify whether the insurance provider is capable enough to offer adequate policies as you grow your business regionally and globally.
The success of your company is the result of your efforts and hard work, and it is imprudent to think that mistakes will not happen in the future. Therefore, protecting your business with professional indemnity insurance is an absolute need and is worth it.
Talk to an advisor at New Age Insurance Brokers who can guide you through the process of designing the right coverage and negotiating best rates and terms for the same.