We all make mistakes and some mistakes can be costly.
Like the building designer who was sued for $1 million worth of design defects in a commercial development. Luckily, the company had professional indemnity insurance and was able to claim the full amount on their policy. Without this insurance, the designers would have incurred a massive financial loss, which might even have caused their business to collapse.
If you’re a business owner, professional indemnity insurance can similarly help protect you against the financial consequences of any mistakes you or your staff might make. It also protects against accusations that you’ve done something wrong, even if you haven’t.
Who is a Professional? Think of a professional and you’re likely to conjure up an image of the typical office worker – an accountant, lawyer or architect. But as far as professional indemnity insurance is concerned, a professional is anyone who is relied upon for their expertise. That could be a surveyor, engineer or IT consultant or a naturopath, real estate agent, personal trainer, or management consultant.
Professional Indemnity protects business owners against allegations of negligence, and claims of malpractice and professional misconduct. There are two types of losses that a policy will provide cover for:
- The legal costs of investigating and defending a claim made against you and/or your business, and
- Any amounts payable in relation to the claim.
Examples where Professional Indemnity Insurance could apply include:
- An accountant who incorrectly advises a client that an expense is tax deductible
- A chiropractor who manipulates a client’s back and causes injury
- A beautician who applies a facial treatment to a client which damages the client’s skin
- A solicitor who provides incorrect legal advice
- A financial adviser who recommends investments which don’t match a client’s risk profile
Business that provide professional advice:
- Health Care providers
- Architects
- Design Engineers
- Lawyers
- Management Consultants
- Auditors and Accountants
- Social Workers
- Software Designers
- Financial Advisors
- Real Estate Agents
- Independent Consultants
- Information Technology Companies
- Health & Safety Trainers