Running a business will have its risks. Luckily, you can protect your business from some of these risks by getting insurance. But business insurance can be a bit tricky since there are different types available. For this article, we'll only be focusing on professional indemnity insurance.
In simple terms, professional indemnity insurance is insurance that covers your business for losses and costs if a third party (the insured) is affected due to your work. Professional indemnity insurance is also known as PI insurance or errors and omissions insurance. It is required by law for many industries such as medicine, law and architecture.
But to get specific, here are some of the things you should understand regarding professional indemnity insurance.
Professional indemnity insurance coverage is something you should understand. Essentially, this covers you from financial loss due to something you did wrong. It doesn't matter if the fault is yours or not; the professional indemnity covers you.
But to be more specific, here are some of the things a professional indemnity insurance policy covers you.
If you cause a loss to a third party, then this insurance will cover your legal and economic losses. Any costs to fix the damage are covered by this insurance. The insurance company will also cover the legal costs.
It will take time to resolve the case. Professional indemnity insurance coverage would cover your legal fees, investigation costs and expert witness fees.
If you lose your reputation, it can bring down your business. Some of the losses covered by professional indemnity insurance coverage are the loss of reputation, defamation, damage to or loss of property, cost of hiring experts or professionals and arbitration proceedings.
In short, yes. You should get professional indemnity insurance for your business. It is a legal requirement for some industries, although the chances of failure are low. You may think that it is a waste of money to get professional indemnity insurance coverage. This is a valid point, but things do go wrong, and when they do, you'll be glad you're covered.
For example, let's say that you're in the medical profession. Your patient comes to you with a medical condition, and you diagnose it incorrectly. The patient is then hospitalised and, unfortunately, passes due to your diagnosis. The patient's family would sue your medical practice, and the patient's estate could win the lawsuit. Not only that, but you may also lose your medical licence. With professional indemnity insurance, the insurer would cover all the costs associated with the lawsuit and also pay for your legal fees.
It's also recommended that you get professional indemnity insurance if you have employees. This insurance will protect you from any legal repercussions from your employees, such as a breach of confidentiality, infringement of intellectual property or breaching the terms of a contract.
At the end of the day, you should get professional indemnity insurance for your business to protect you from any potential losses, costs and risks. No one wants to lose money, but things do happen. You should always be proactive in protecting your business.
Protect your business with the help of Ensura. We are Sydney-based insurance brokers that provide professional indemnity insurance in Australia. Our experts will work with you to understand where your risks are and what cover you need. Get a quote now!
Disclaimer: As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy document. The information contained on this webpage is general only and should not be relied upon as advice. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific insurance product. It is only intended to provide education about the financial and insurance industry. The views reflected in the commentary are subject to change at any time without notice.
