professional indemnity insurance

Written By: Stacey Gatcliff on November 2, 2011 No Comment

professional indemnity insurance

Article by Rani

While professional indemnity cover is a legal mandate for some types of businesses for others it is just a sensible recommendation. Prudence dictates that you have some sort of cover to protect your business and investments in an increasingly litigious environment. This particularly holds true for establishments that offer knowledge based advice or services. However if your business offers any type of service or product to consumers, you should definitely consider getting yourself professional indemnity cover. If you don’t already own a policy, here is a look at 5 benefits of professional indemnity cover that will help you to make an informed decision.

Benefit #1: The most obvious advantage of professional indemnity coverage is of course protection from legal liability in case of a lawsuit. Not only does the policy cover you against monetary settlements and awards but also it protects you against the exorbitant legal cost that you may have to contend with as a result of such litigations.

Unfortunately, lawsuits related to claims of business malpractice, inappropriate advice, breach of trust etc. are complicated and time consuming which means that you are bound to run up huge legal bills; this will certainly create a financially precarious situation for your company. Add to it the thousands or even millions that might be awarded to the litigant and it is easy to understand why you need professional liability coverage today.

Benefit #2: A professional indemnity policy will not only cover your legal payouts and expenditure but will also it will pay for any remedial measures that need to be undertaken in order to avoid such claims. This is needless to say a simpler and a far less cumbersome solution for everybody involved in case something has gone wrong and both parties agree to rectify the issue without taking the matter to court.

Benefit# 3: A lot of clients and even business associates require a company to have professional indemnity cover before they consider working with an establishment. So if you have such a policy, you may be able to apply for deals that may have otherwise been off limits to you. You will find that an increasing number of government, private and even public sector firms are refusing to consider tenders from businesses that do not own professional indemnity cover. So, you will be missing out on a lot of lucrative business prospects by now owning such a policy.

Benefit #4: In case of a lawsuit where you feel that you are being wrongly targeted, professional indemnity coverage gives you the opportunity to enlist the help of an expert panel of defence attorneys. While large businesses may be able to afford the services of eminent law firms, the same cannot be said for small and mid-size business owners who are left grappling with novice legal practitioners. It can be truly frustrating for a businessperson to know that they are being pulled up for no fault of their own and in all likelihood will have to pay the plaintiff. This type of policy will help you to defend your rights and the reputation of your business

Benefit#5: Finally professional indemnity insurance will protect you against untoward incidents that may be attributed to a lapse of judgement or even an accident as opposed to negligence; for instance, if one of your employees accidentally deletes a client’s data. It can be very comforting to know that you are protected against all eventualities that are often a part and parcel of everyday work life.

On the other hand, the only disadvantage of purchasing professional indemnity insurance is that the policy lasts only for a year and you will have to renew it till you intend to be in business regardless of whether you get sued or not.

While professional indemnity cover is a legal mandate for some types of businesses for others it is just a sensible recommendation.professional indemnity insurance Prudence dictates that you have some sort of cover to protect your business and investments in an increasingly litigious environment. This particularly holds true for establishments that offer knowledge based advice or services. However if your business offers any type professional indemnity insurance of service or product to consumers, you should definitely consider getting yourself professional indemnity cover. If you don’t already own a policy, here is a look at 5 benefits of professional indemnity cover that will help you to make an informed decision.