Having the right insurance is important in order for businesses to properly function and survive. From property coverage to liability policies, they exist to shield the company from various unforeseen events that may result in damaging financial blows that can cripple the business and prevent it from achieving its desired success. With the multitude of different kinds of insurance available, it’s easy to overlook a few essential ones. One of the most important is professional indemnity insurance.
What exactly is professional indemnity insurance?
In a nutshell, professional indemnity insurance is a type of cover that protects companies against claims for damages from third parties alleging that they were given misleading or inappropriate advice or service.
Such claims typically relate to negligence, copyright issues or unintentional confidentiality breaches. These may seem to be problems that can be easily avoided, but it’s never a bad thing to err on the side of caution and add a layer of security in the event that mistakes happen.
Coverage of Professional Indemnity Insurance:
Professional indemnity insurance covers the legal fees and potential damages associated with claims from third parties that your company has caused them financial loss due to inadequate service, bad advice, or a breach of contract on your part. But the specific policy you have with your insurance provider will dictate to what extent the costs of any liability claim are covered by your insurance.
You can learn more about this type of insurance and exactly what type of coverage you need by reviewing Hiscox professional indemnity insurance. Important considerations include contractual requirements for PI cover, and calculating the potential cost of legal defense fees and damages in relation to your sector. In the event of a claim, having comprehensive cover will make all the difference, so be sure you’ve chosen the right policy.
Is it Mandatory?
While professional indemnity insurance may not be compulsory by law, certain professional bodies, as well as regulators, will oftentimes require you to have it for your business to function. Why This isn’t limited to certain professions such as law and accounting either. In fact, as long you are providing a service or have access to any confidential information that can affect the financial integrity of your customers, it can be just as advantageous to secure professional indemnity insurance as other business insurance policies.
Should you get it?
If it’s financially feasible and won’t break the bank, it’s better to have professional indemnity insurance in place. It will not only help get you out of a financial pinch, in terms of legal costs, but it will also give you peace of mind that your work is covered and allows you to better run your company without any distractions. It will go a long way toward keeping your company from being underinsurance and suffering potentially catastrophic financial losses too.
At the end of the day, the success of any business or company hinges on financial security and safety. Everyone makes mistakes, and as much as we may try to minimize them we cannot eliminate them completely. By having professional indemnity insurance, you’re adding an extra layer of security for your business and allowing it to grow and thrive without the fear that an error could sink your company. Keep in mind, however, to put in the time doing research and comparing rates. This will help you get the most out of your money.