Professional Indemnity Insurance: A Much Required Professional Need

Typically, professional indemnity insurance is required by those business professionals who provide advice to their clients. This brings a large number of professionals under the umbrella of this category of insurance. Doctors, Lawyers, Accountants, Architects….in fact any profession that provides consultancy services needs to be insured. The need for this insurance arises out of the premise that a client can be dissatisfied with the advice provided and can claim damages based on either alleging inaccurate findings or wrong guidance. This is all very subjective, depending entirely on individual perceptions and it is best for the professional to protect himself against the whims and vagaries of the client’s mind.

Companies provide protection for the policy holders against claims that range from allegations of negligence to omissions in carrying out the client’s business, from loss of professional data and documents to dishonesty and defamation. Insurance companies function on a basic premise. That it takes years to acquire a professional qualification and even more time to establish one’s reputation and credibility as a consulting professional. Just one claim of negligence can destroy years of hard work that have been spent to create the bulwark of a professional’s livelihood. Not only that, the legal costs of dealing with such suits can be crippling to a fledgling professional and can often put one out of business. It is only human to err and professional indemnity insurance ensures that stray human oversights or errors do not destroy one’s professional standing and career.

Premiums are usually high for this kind of insurance but gradually the realization among professionals is seeping in, that often the cost of a crippling lawsuit far outweighs the costs of protecting one’s professional life with such a policy. A single suit can cause ruin and very often it takes years to recover not only financially but also with regard to professional confidence and morale. This definitely justifies the need to protect oneself.

Different professions have different requirements and changing needs. Sometimes the professional can seek the help of an insurance specialist to understand his needs and chalk out an insurance plan that is best suited to his situation. An insurance consultant can guide one to the correct type of coverage and even advice one if he needs a policy that is limited. The payments of premiums can be structured according to the financial capabilities and ease of the client. Detailed advice can be provided on the different types of coverage and policies available allowing the client to make an educated decision.

In fact some companies even offer discounted rates if professional indemnity insurance is clubbed with other insurance products that the company provides. It pays to do one’s homework in this regard as one is a service provider as well as a client simultaneously. Each individual professional knows his own needs and limitations and should work in tandem with his insurance provider to get himself the best possible coverage.

About the author

Robert Ellis is a freelance insurance advisor who provides suggestions to clients on various aspects of life and Professional Indemnity Insurance cover. He is associated with Bizcover.com.au and provides guidelines on Professional Indemnity Insurance, IT insurance, accounting, business and office insurance and more.