Understanding Insurance, Part Two: Professional Indemnity Insurance
There’s a great deal of responsibility and care required when you provide specialist advice and services for a living. No matter how professional you may be, all it takes is one dissatisfied client for you to potentially be dealing with a lawsuit or insurance claim. Fortunately, this is where Professional Indemnity insurance can provide protection when you need it most.
In part two of our Understanding Insurance series, we focus on Professional Indemnity insurance.
What is Professional Indemnity insurance?
Professional Indemnity Insurance* is designed to protect you and your employees by providing cover against claims alleging professional negligence, including the costs of legal defence. Professional Indemnity insurance offers peace of mind that if the worst should happen, you have protection in place to safeguard your finances and hard-earned reputation.
Why do I need to consider Professional Indemnity insurance?
When you’re providing your expert advice and services you have a duty of care to your clients and this is where the Professional Indemnity insurance comes into play. If a claim were to be made against you, having adequate cover in place could be the difference between staying in business and or closing the books for good.
These are some examples of when you may need Professional Indemnity insurance:
- If you provide paid professional advice or services to a business or an individual
- If you work as a contractor for the government or another organisation which requires Professional Indemnity insurance as a condition of the contract.
Some of the typical professions which may require Professional Indemnity insurance include: consultants, accountants, real estate agents and health practitioners.
Types of Professional Indemnity claims
These are some examples of Professional Indemnity claims:
- Failing to provide promised services
- Being negligent in rendering professional services
- Providing shoddy, incomplete, or incorrect work
- Making mistakes or oversights
- Omissions in the provision of your service
What does Professional Indemnity insurance typically cover?
- Damages and claimant costs awarded against the insured
- Legal/defence costs
- Claims investigation costs
- Inquiry attendance costs
- Public relations costs
What is typically not covered by Professional Indemnity insurance?
- Intentional damage
- Prior known claims and circumstances
- Fraud and dishonesty
- Bodily injury / property damage (unless these arise from a breach of your professional duty of care)
What level of Professional Indemnity insurance do I need to consider?
BizCover offers Professional Indemnity policies for cover levels ranging from$250k to $10M. Here are some factors to consider when determining how much cover you may need:
- Does your profession have statutory coverage requirements?
- If you are a member of an industry association or professional body, are you required to obtain a minimum level of cover?
- What is the value of the jobs you perform?
- What are the potential risks your business is exposed to? How much would it cost to rectify any mistakes?
Find out more
At BizCover, we don’t believe in messy paperwork or using jargon. We want to make buying business insurance a stress-free process without the hassle. Jump online to experience insurance made easy today.
*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.