Accidents happen, they are never planned and are unpredictable. Professional indemnity insurance will pay out any compensation claims in the event that your mistake causes your client to suffer financial loss, or in the event that your business failed to provide the quality of service which it promised.
Professional indemnity insurance covers you in the case of :
Unintentional copyright and confidentiality breaches
Loss of goods or money
Loss of documents or data
The most common optional extras are:
Data protection and copyright breaches
Breach of confidentiality
Loss of documents
Bodily injury (from breach of professional duty)
Dishonesty of employees
Court attendance costs
Professional indemnity insurance is particularly important for businesses which offer advice, design or consultancy, and is suited to a variety of industries, including:
The main reason for having professional indemnity insurance is to protect your business financially in the event that a compensation claim is made against it, and to cover the costs associated with defending such a claim.
This can be defined as liability that does not arise by way of negligence, but instead by assumption under contract or agreement. Some PI insurers offer to cover an element of contractual exposure in order to meet certain basic professional needs of the insured party.
Today society is increasingly compensation-minded, and anyone who has defended a negligence claim will be aware that it can be an extremely stressful experience with very high costs. Insurance against such circumstances is a necessary requirement of professional practice. You can also use it as a great marketing tool to set you apart from your non-professional competitors. For these reasons and many more, professional indemnity insurance is a must have for any professional business or individual.
This is when a professional signs up to a contract which might impose a liability that goes beyond what one would normally expect. Contractual liability that is not caused by negligence is often excluded from professional indemnity insurance policies.
Anyone who sells knowledge or skills will require PI insurance. It is important that you invest in a professional indemnity insurance policy in order to make sure that you are protected against a number of unfortunate circumstances that may arise.
A typical PI insurance policy will provide indemnity to the insured party against the loss arising from any claims for breach of duty which may be made and reported to the insurers during the period by reason of any neglect, error or omissions committed in the conduct of the insured professional business.
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