Benefits of Professional Indemnity Insurance
The need for professional indemnity (PI) cover has grown over the past several decades as more people enter professional service-based occupations. While PI insurance still covers 'traditional' professionals - such as doctors, solicitors, accountants and architects - a new market of professionals now needs to consider PI cover, including business consultants, recruitment agencies and IT contractors. Whether a traditional or new professional, you can protect yourself, your business and your reputation by investing in this type of cover.
Comprehensive PI insurance can safeguard you and your associates (eg. employees or third parties) against catastrophic losses in the event of legal action due to a negligent act, error or omission made in a professional capacity. In addition to claims of error, omission or negligence, this insurance may also protect against slander, libel and breach of contract.
PI insurance policies are tailored to address your professional risk and can offer a number of important benefits, including:
Legal defence - If a client files a claim against you, you'll be required to defend yourself in court - regardless of whether the claim is justifiable. PI will provide you with cover for all of your legal expenses associated with the case.
Legal compensation - In the event that a client wins their case against you, they will most likely be awarded the sum of money that was lost as a result of your advice. Depending on the claim, the client could also be awarded additional compensation. Both types of payments are covered by a PI policy.
Run-off insurance - Even though your business may no longer be operational, you may still have a claim filed against you. Run-off insurance helps to ensure that those claims are covered.
Fidelity guarantee insurance - Unfortunately, your business may experience a financial loss, or items from your property may be stolen as a direct result of fruad, theft or dishonesty by one of your employees. Fidelity guarantee insurance helps to cover the cost of what was taken.
Liability for breach of warranty of authority - If your business takes action in good faith on behalf of your client but you do not have the authorisation to do so, this warranty will provide you with the cover for any expenses accured.
Collateral warranty - This is a particular kind of contract in which a consultant, building contractor or a subcontractor has with a third party to ensure that they follow through. If the third party does not, the warranty provides your business with cover.
The specifics of a PI policy, including cover levels and features, will vary between organisations.
Contact Portsoken today to learn all about the PI cover options available to you.
