There are various ways a professional can be sued by its clients. However, the most popular reason remains the claims of damage – physical, financial, intellectual or property damage because of the services provided by the professional or his employees. The claim may or may not be true and intentional, but once made, it has to be given priority and defended to save reputation and not appear guilty. Not defending and succumbing to the claims (even for peace of mind) can be misinterpreted for acceptance of blame. Therefore, it is better to be sure of a backup when such situations are probable, even for a 10% ratio.
Professional Indemnity Insurance offers this assurance. It protects the insured from legal costs that arise with the claim. It will incur these costs of lawsuits even if you lose. However, it will not wait for the claim to result in lawsuit it will protect you beforehand by covering the compensated payment of your client.
But, what exactly this insurance is all about?
It is all in regards with protecting negligence that may be looked at as a mistake (a serious one) by your client. The unhappy client might go on to claim a lawsuit or make a legal remark against your profession for the damage it brought to him. This is where this insurance will help you.
While, your clients are free to sue you for the damage your profession brought to them through a bad advice, losing their confidential information, losing their personal information, not delivering what you were going to or failing to solve their problem; you have the right to defend yourself. This is where the professional indemnity insurance comes in use. It covers the cost you spend on lawsuits to defend yourself and the compensation of your client. However, the cost covered will be up to the level provided by your policy and not just any amount.
This does not limit the importance of the insurance.
When you are a professional specialist, say, an adviser, solicitor, or architect, your reputation matters. It is the trust that builds your clienteles and brings you income. However, years of reputation can wash away with one claim. Thus, being insured is necessary to avoid such unfortunate events.
You might even be an owner of an office with several errands running under your guidance along with your employees. You surely will have no time to check whether what is happening in different arenas of the office on a daily basis. If this is so, it is important to get your employees under the policy to safeguard finances and status from any negligence made by an employee.
So, if you are a professional from service-related industry like architects, engineers, accountants, financial advisors, bankers, web designers, marketers, graphic artists, writers, doctors, healthcare professionals, etc. that provides consultancy, contracting, and transport; you may want to get insured now.
Nevertheless, pay attention on certain things before purchasing the insurance. Begin from understanding your required coverage (by hiring an expert of the field).
Secondly, make a thorough agreement of your services by highlighting all its responsibilities and duties. Keep your coverage organized.
Thirdly, find the best policy by comparing several quotes and with the help of an expert. Read the policy in details (including small prints and exclusions) and talk to the provider about anything you do not understand or anything you want to add.
Fourthly, ask the expert for any concessions or incentives that are offered. Take advantage of discounts that you are eligible of. The actual price will depend on the coverage of your insurance.