You have no doubt heard these words before: “professional indemnity insurance.” You might however be unclear about what they mean, and/or why this kind of insurance could be relevant to your business.
We’ve certainly been asked about this many times over the years. Therefore we thought we’d begin this post with some basic information.
What is professional indemnity insurance?
Professional indemnity insurance is a form of cover specifically designed for organisations and individuals who provide professional services to their clients.
It provides protection against individuals who may claim your business has caused them disadvantage, or committed malpractice or professional misconduct.
The danger of thinking ‘it will never happen to me’
If one of your clients mounts a successful claim that your business has caused them reputation damage and/or financial loss (perhaps because of incorrect advice or a breakdown in communication) you could be liable for large amounts of legal fees and compensation claims.
It is tempting to think “it will never happen to me.” However legal action often arises from unforeseen events.
Even if you haven’t done anything wrong, an unsubstantiated claim against you could cause considerable damage to your business’ reputation. You will probably not just want to settle a claim quickly, but defend the claim in court and clear your name. And legal representation, as we all know, is far from cheap.
What types of businesses need professional indemnity insurance?
The short answer is: many different types. These include, but are not limited to:
- Management, business and financial consultants
- IT professionals
- Construction companies
- Recruitment agencies
- Designers (web, graphic, interiors)
- Teachers and tutors
- Fitness professionals
- Travel agents
Find out more information
Would you like to receive advice about whether your business should invest in professional indemnity insurance? We’re more than happy to consult with you. Please apply online or call us on 1300 787 789.