The professions which involve giving advice or specialist services are exciting but always at the risk of something going wrong. In several cases they have to counter claims of alleged or actual negligence or breach of professional duty. These professionals need indemnity insurance that provides them much needed financial protection against claims. The professions which need professional indemnity insurance the most are:
1. IT professionals
2. Business and Management Consultants
3. Fitness Professionals
4. Teachers and Tutors
6. Recruitment Agencies and Consultants
Why do advisors and consultants need indemnity insurance?
Clients generally pay a huge amount for expert advice and services. If anything goes against the client’s wish or plan, the matter can soon turn into a lawsuit no matter the advice you gave was the best for the time being. Things sometimes may not go as planned however experience you may be. Let not a small error of judgement ruin the business and reputation you have built with your hard work. Professional indemnity insurance Australia gives you protection from a wide range of potential risks.
In a career of an advisor, sometimes the client may allege that you did not pay attention to a critical piece of information, wrongly presented the fact or misinterpreted them which resulted in astronomical financial loss to the client. In such a scenario, the client may take legal action against the advisor to recover losses. The advisor needs a professional indemnity insurance so that a claim does not ruin his assets and reputation.
The importance of indemnity insurance:
Opting for professional indemnity insurance does not mean that you do not have confidence in your skills or your professionalism is not up to the mark. The risk of any unhappy client making a claim against you can never be denied and it is totally out of your control. Indemnity insurance ensures that you have control over what happens after a client files a claim against you.
Whether the claim is true or false, professional indemnity insurance pays for legal defence. If the judgement is rendered against you, then also the insurance pays for settlements or compensation up to the limits stated in the policy.
The Overlooked Aspect- Covers the Cost of Litigation:
Countering a claim involves legal cost which can be as high as $100,000. For small businesses, this is quite a huge sum. In such a situation, if you have professional indemnity insurance, it will cover the cost for a defence. Some professionals opt for easy settlement and some chose to fight to save their reputation. Considering the long-term impact on your career, it is always better to prove yourself innocent rather than letting admission of guilt devastate your reputation and career. Settlement may sound an attractive option at the moment, but in the long run it leaves a bad impression on your reputation implying that you were guilty. If you have professional indemnity insurance, you can get involved in the legal case without worrying about its litigation cost and fight to the last to protect your reputation.
What is covered in the professional indemnity insurance?
The chief aim of professional indemnity insurance is to protect your asset, reputation and contents of your bank account. Before making a mind to purchase the insurance, it is important to know what kind of damages it covers.
– It covers damages and claimant costs in case the judgement does not come in your favour.
– It covers civil liabilities which may arise from but are not limited to:
– Providing advice that is misleading or negligent
– Breach of duty with regard to confidentiality and other privacy issues
– Defamation, libel or slander
– The lost or damaged documents
– Copyright infringement and infringement to intellectual property
– In case of a claim, related defence and legal costs
– The cost of claim investigation which also includes sum paid to a professional body for investigation.
– The cost of responding to a disciplinary inquiry
– Costs related to court attendance
– Costs related to Public Relations
– Bodily injury or illness caused from the professional services
What is NOT covered in the professional indemnity insurance?
– If it is proven that the damage was done intentionally then none of the costs will be covered.
– Claims or circumstances that occurred before the period of insurance
– If it is proven that it was an act of fraud and dishonesty
– Accidental injury and damage to the property
Apart from professions mentioned above allied health professionals, management consultants, recruitment consultants, engineers, marketing consultants, IT professionals, nurses, building inspectors and psychologists too should opt for professional indemnity insurance. It brings you a great peace of mind and empowers you to make decisions and move ahead in your career without much worrying about the error of judgement.