Functions of Professional Indemnity Insurance
Professional advice and expert services to help your clients are a daily job as a professional. Even if you spend all your care and time in the world on offering high competence, the reality is that complaints can still arise, even if you least expect it.
This is where professional indemnity insurance comes into play. This form of insurance is meant to protect companies that offer specialized services or professional advice. Let’s dig a little deeper and examine facts about this important form of business insurance.
What does professional indemnity insurance cover?
Professional indemnity insurance is designed to answer claims against your business for losses due to actual or alleged negligent acts or failure to provide your service or professional advice.
Professional indemnity claims can arise from simple things such as wrong advice, wrong calculation, wrong diagnosis or treatment.
Some of the things your professional indemnity insurance usually covers:
- Payment of damages as a result of a claim, including, but not limited to, the right that was awarded for damages
- Reasonable legal costs incurred to defend or respond to the claim
- Costs of investigating complaints
- Disciplinary costs
What does occupational injury insurance not cover?
These are some situations where your employees’ indemnity insurance usually does not cover:
- Contractual disputes
- Disputes about your professional fees
- Personal injury or property damage (unless it is due to a breach of your professional duty)
- Intentional damage
- Fraud or dishonesty
Who needs professional indemnity insurance?
Professional indemnity insurance aims to protect those who offer professional services or advice. Some of the common examples of these professions are accountants, real estate agents, engineers, IT specialists and many more.
Even those in more practical roles, such as consultants and event managers, should consider the benefits of professional compensation insurance to protect themselves and their business.
How Much Does Professional Indemnity Insurance Cost?
There is no single policy that is fully compatible with professional indemnity insurance. Each individual is different, with exposure to different risks. Different types of professions have unique risk categories, such as a general rule, the higher the risk, the higher the premium.