If you provide services or give advice as part of your business, you need to ensure your business is protected if legal action is brought against you for injury, property damage or financial loss because you did something (or failed to do something) whilst you provided those professional services. Commonly, professional indemnity insurance is described as covering an act, error, omission, or breach of professional duty.
This form of coverage essentially covers the advice which a professional would give for a fee. Many professions are done on just an advice basis, with no physical work taking place.
Many people confuse public liability cover and professional indemnity insurance. Liability will cover physical damage to property or persons as a result of your negligence. Indemnity, however, is purely for non-tangible advice which is followed causing a loss.
As an example, an investment broker would provide financial forecasts in the stock market to businesses and individuals. The broker would then advise the client where best to invest large numbers of shares, in order to increase their portfolio of wealth.
The stock market, being a volatile and difficult industry to predict, comes with the chance that any shares may increase or plummet as a result of an unforeseen national or global incident. Because there are so many factors at play, many times a broker can make a mistake, causing the loss of funds for his or her clients.
Professional indemnity insurance is looked at as a safety-net in place to cover the broker in the unfortunate event their advice causes a major loss for the client. As the client’s business success may hinge on the advice delivered, many people would not hesitate to begin legal proceedings against the broker to ensure their own business does not go under.
Defending legal action could be extremely costly itself, without including the cost of any damages awarded against you, the cost of your absence to attend legal proceedings, and the potential reputational damage to your company. Therefore, you must have robust insurance available to assist you both through the process in a manner enabling you to adequately defend yourself, in addition to allowing you to carry on your business and continue providing reliable service to your clients.
This same analogy can be applied to accounting, information and technology, engineering, real estate and property, structural inspections, mining, human resources, trainers or instructors, medical industry staff, etc. Many industries now require this type of insurance as a mandatory cover before trading due to past court settlements causing consultants and their consultancies to close down.
Professional indemnity insurance can include cover for:
Professional indemnity insurance ordinarily will not cover intentional damage and contract liability.
We offer professional indemnity to a very wide range of industries currently and are always looking to expand our brokerage with new business in unique industries not listed above.
If you are unsure whether you require professional indemnity insurance, it is recommended that you speak with an experienced insurance broker, who is able to provide you with guidance on whether your industry and/or services are ordinarily covered. You should also check to see whether your professional board, membership body or industry association requires you to hold professional indemnity insurance to perform work in your field.
If you require more information on professional indemnity insurance quotes and to find out what actual cover you need, please give one of our consultants a call on 1300 669 664 and we will be happy to help you out with all of your business insurance requirements.
Contact Us today to learn more about how we can assist you to determine whether you require insurance coverage for professional services, and choose the coverage that adequately covers your business, based on the services you provide.