Insurance can take many forms and guises, and the many different types can often leave people stumped and confused as to which is best for them. Here we will look into one particular type, Professional Indemnity Insurance, and what it can do for your business.
Professional Indemnity Insurance will prove invaluable the moment that your business is accused of making a professional mistake. If such a situation should arise, for whatever reason, having plans in place will be vital. Keeping insurance policies up to date has never been more important for a business than it is in the current age of compensation culture. People are more keen than ever to cast their eyes about, look for anything that could be construed as a mistake, and take action if they feel they can.
Having the insurance in place will mean that your business and the individual employees contained within will be protected from allegations from third parties, and will cover any legal fees that may be incurred during the process, as well as the cost of any compensation that may arise. For businesses working within certain areas, such as financial services, having a Professional Indemnity Insurance policy in place is a legal requirement. For others it is highly recommended. Property professionals and accountants are particularly advised to take out policies, due to the risks their business occurs on a day to day basis. A mistake made by an accountant could cost his client on a severe financial level, a mistake in making a property evaluation could potentially cost a homeowner significantly for example. If these forms of mistake occur, the protection would come via the Professional Indemnity Insurance. It is also worth noting that whether you charge for professional advice is unimportant. If your business is issuing advice free, or as part of some benefits package, there is still scope for exposure to liabilities and therefore possible claims of negligence.
The way in which the Professional Indemnity Insurance operates in a way different from certain types of insurance, basing itself on the ‘claims made’ model. Essentially what this means for your business is that it is the policy which you hold at the exact time when the claim is made that moves into operation, rather than the policy held when the alleged professional mistake occurred. This means that a third party can make a complaint many years after the work or advice took place, potentially putting your business in a tricky position. This highlights the need to keep a Professional Indemnity Insurance policy in place at all times, and keep it up to date, relevant and effective, regardless of whether work is currently taking place.
Professional Indemnity Insurance packages can be tailored to fit the needs of any business, so it is always worth discussing options and finding out what suits your particular needs best. There is no ‘one size fits all’ policy, every business will require different cover. What is essential to remember however, that the cost of choosing not to insure yourself could put the financial security of your entire business at severe risk. Learn more about Professional Indemnity Insurance for your business at Endsleigh.co.uk