If you are a service provider who offers advice, consultation or assistance in various projects to your clients, it becomes absolutely necessary to protect your client’s interests that are related to the services you provide in a legal way. There are many professions in Australia that require Professional Indemnity Insurance in a mandatory way and has become an essential and vital part of their business.
There are many professions in Australia that essentially require you to go for the indemnity insurance. If you are a medical practitioner who offers advice to your patients, you must own the insurance. Surveyor who is responsible for surveying the project should have the insurance. People or businesses involved in Mortgage services, people owning insurance brokerage firms, financial advisers and architects who design or give advice on construction projects also must have this professional insurance as a mandatory asset.
Do you need professional liability insurance?
If you manage a firm or a business, you are involved in a lot of other aspects from the business apart from what the world sees or experiences. If you are a startup or a small business, you leave no stones unturned to make your business a successful one and attract clients from whenever possible. This makes you involve yourself in marketing, managing finance and human resources which you otherwise are not related directly as you are involved in the advising task which is your core business.
Now, since you are a human and prone to errors, there is always a possibility that in spite of taking all the precautions and wanting the best for your clients, your client might suffer a financial loss following your advice or the service. In such a case, a client might claim compensation legally from you which could cost a huge impact on your business not only financially but mentally as well.
Is it mandatory to take professional liability insurance in Australia?
Taking professional liability insurance Adelaide in Australia is not mandatory and in fact it is not mandatory in any part of the world but is considered to be an essential part or asset of every business. Consider liability insurance just like any other insurance like health insurance or phone insurance where it is not essential to take those insurances but if you have them, you will get a lot of advantages in crucial times. Similarly, if you have liability insurance and you make some bad decisions in giving your clients the advice they seek from you and if they make any financial losses due to that, the claim they make will be compensated by the insurance companies. Even if you are sure that you are not going to make any errors while giving advice to your clients, it is still advisable that you take the insurance.
Why is liability insurance important
As discussed already, legal actions always come from unforeseen events and no matter how cautious you are, being a human, you are always prone to making errors. If your services or advice cause financial loss to your clients, there is always a good chance that your client will file a compensation case on you. Even huge businesses have been seen to collapse due to this in the past and this is the reason whether small or large, every business you see in the market that gives a service or an advice, takes up liability insurance these days.
Things not covered under professional liability insurance
There are obviously many aspects that are covered under liability insurance and that is the reason why most of the firms go for it but before taking the insurance, you must know what is not covered under it so that you are not in the state of confusion while making the claims.
While liability insurance covers your professional negligence, loss of data or documents and unintentional breaches of copyrights, there are few things that are not covered under it. First and the foremost thing that you must keep in mind is that professional liability insurance does not cover any professional damage that is caused to your business because of your negligence as it covers monetary losses. Although it covers unintentional defamations caused by your clients
Also, liability insurance does not cover breach of contracts so you should not have any doubts regarding that.
