Professional indemnity insurance is a type of insurance that not very many people can understand. It is very complicated. There are some easy facts that can make this insurance simple though.
First, it is important to understand what this type of policy coverage does.
This type of insurance is for those who work in an industry that requires them to gives others advice and a professional environment where others do in fact rely on that advice.
This means that they are seen as experts in a particular field. If your advice does not pan out, others could sue you because of that. A good example might be a stock broker. People who want to make their portfolio more versatile will call them to find out what they think about a certain stock.
If you tell them that the stock is a plus and they should invest in it and then it fails and they lose a lot of money, they could sue you for the money they lost because of your advice.
Another example might be an accountant who prepares taxes. Let’s say a client comes to you to prepare and file their taxes. You end up preparing them but you never file them. Not only is this extremely irresponsible but it could your client a lot of money and they could be fined. Since it negligence on your part they can sue you for not filing the taxes that you were entrusted to file.
Professional indemnity insurance will protect you and help pay for these legal costs if you get sued. However, you should be sure to read your policy to find out exactly how much of those fees and legal costs will be covered. The amount is specified in your insurance policy.
Most businesses do not like to think about this type of insurance. It is the highest cost of insurance to businesses. This type of insurance can take like 12 weeks to get set up and is very time consuming. It is really hard to tell whether or not a business is getting the best deal possible and business owners just do not want to deal with it.
Professional indemnity insurance is very important for businesses. They should definitely want to be protected especially if they are the type of business or professional who gives advice. There are a lot of chances that could open up avenues for legal claims against them.
You never know when your advice will not pan out whether you are an expert or not. You cannot predict everything, like stocks. You never what will work and what will not work and you always want to make sure you are protected.
Professional indemnity insurance is hard to understand. There are a lot of complicated aspects to it and it is time consuming to try understanding and securing a policy.
However, it is important for professionals to be protected. Yes it can take 12 weeks to get a secured policy; but, 12 weeks of your time is much better than a great loss of money due to being unprotected.
By James Clapton