A professional indemnity insurance policy is similar to a professional liability insurance policy. This is because they are designed to cover legal costs and expenses incurred in defending you. This cover would protect you from damages you may incur if you are found to have provided inadequate advice, services, or design that causes your client to lose money.
Is Professional Indemnity Insurance Necessary?
Insurance products are a necessity in today’s world, although it can be difficult to know whether you need certain types of insurance or not.
A lot of people don’t even consider professional indemnity insurance until something bad happens and they realise they don’t have the right coverage in place.
Professional Indemnity Insurance is designed to protect professionals from claims that arise out of their work. For example, if a poor job is done, defamatory statements are made, or medical errors are made while treating a patient.
For example, if you were an accountant and made an incorrect calculation that led to someone losing their life savings, then your clients may come after you to try and recoup their losses.
Professional indemnity insurance is a must for all freelancers and small business owners who need to offer their services to clients and venture out into the unknown.
What does a professional indemnity insurance policy cover?
The whole premise behind professional indemnity insurance is that, as a professional, you have a duty to your client. In layman terms, you have a legal likelihood of being sued for malpractice or negligence, hence the name “professional indemnity” policies. These policies pay for financial loss, personal injury and property damage, the damages and/or liability of a professional which could result from negligence or wrongdoing, as deemed by a court of law.
Professional indemnity insurance is a type of policy designed to cover the legal costs of doctors, accountants, and lawyers in case they make a mistake. For instance, if a medical professional misdiagnosed a patient for a medical condition (Contact Gadsby Wicks If you have had a meningitis misdiagnosis or some other solicitor), the patient can file a case against a doctor and ask for compensation. In such a situation, professional indemnity insurance can be beneficial for a doctor to pay off the fine and compensation amount.
Who needs professional indemnity insurance?
You may need professional indemnity insurance if:
- Your clients receive advice or professional services from you (including consulting and contracting).
- If you work as an architect or engineer and provide designs to your clients.
- You are a contractor, consultant, freelancer, or self-employed professional
- This is a requirement of your industry association/regulatory body
Professional indemnity insurance is not just for builders, doctors, accountants, and IT professionals. It is something that every professional running an online business should have. It pays to be properly insured if you look after other people’s money, deal with sensitive personal data, or sell your products to the public.
If you’re a blogger, private practitioner, freelancer, or simply run a small business from home, chances are you don’t have professional indemnity insurance.
As professionals, our business is to be trusted.
We rely on our clients’ trust in us to make informed decisions on their behalf; their faith often is the basis upon which they decide to retain or appoint you as their advisor.
A client’s decision to retain your services or appoint you as an agent is a reflection of how much they trust your professional expertise. Consequently, it is doubly important that you protect yourself against any liability that may arise from an action taken on the client’s behalf by investing in professional indemnity insurance, also known as PI Insurance, or malpractice insurance.