If you own or otherwise manage a business, you may have encountered professional indemnity insurance when looking for an insurance policy. Professional indemnity insurance is a kind of liability insurance. Specifically, it protects your business from the financial consequences of any liability arising from your negligence. This article will explain professional indemnity insurance in more detail. It will also consider important legal and commercial matters.<\/p>\n\n\n\n
Professional indemnity<\/a> insurance protects your business from any negligent acts it may commit. As the name suggests, if you are found liable for negligence, the policy’s purpose is to pay out any damages you would otherwise be responsible for. Consider the following example.\u00a0<\/p>\n\n\n\n Say you run a consulting business. One of your employees accidentally gives improper advice, which a customer relies upon. This subsequently costs your customer \u00a31 million in damages.<\/p>\n \n In the eyes of the law, your business failed to exercise reasonable care and skill in providing its service to your customer. Hence, your business was negligent.<\/p>\n \n If the customer initiates an action against your business and is successful, absent a professional indemnity insurance policy, your business would have to meet the value of the claim.<\/p>\n <\/p>\n<\/div>\n\n\n\n However, having a professional indemnity policy in place could mean the insurer pays for the claim instead of your business paying out the value of the claim. This is a much better alternative.<\/p>\n\n\n\n Professional indemnity insurance is primarily for businesses that provide professional services. This commonly includes:<\/p>\n\n\n\n Depending on your industry, you may be under a legal obligation to acquire professional indemnity insurance. For example, a necessary condition for practising as a registered solicitor or account is obtaining professional indemnity insurance. If solicitors and accountants do not obtain indemnity insurance, they will breach regulatory laws, resulting in the revocation of their practising licence. <\/p>\n\n\n\n That said, not all professional service providers have regulators. Therefore, your business may not necessarily need to obtain professional indemnity insurance. However, any prudent business should still obtain comprehensive professional indemnity insurance. Another way of looking at professional indemnity insurance is that it allows your business to operate without having to reserve a substantial portion of cash to meet potential liability claims. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nDo I Need Professional Indemnity Insurance?<\/h2>\n\n\n\n
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