There is hardly any professional who would agree to being accused of unethical acts by clients, whether such allegations are even true or not. To be indicted from doing such acts is not only damaging to the professional career of a person, but it also damages his overall reputation. Fortunately, professionals can protect themselves with professional indemnity insurance for any financial loss brought by clients who are intent in crippling you both financially and in reputation.
Professionals and businesses are eligible to get professional indemnity insurance as this is a means of protecting not just their financial interest, but also their reputation and respectability in their chosen industry. There are actually some laws that mandate certain professions and businesses to have this type of insurance. This will include architects, financial advisers, mortgage intermediaries, and insurance brokers. However, for some professions and businesses, this type of insurance is not mandatory; nevertheless, it is recommended or encouraged for them to have it.
Professional indemnity insurance is an insurance coverage designed to give protection to professionals and businesses over services provided but incurs mistakes wherein their clients sue them and insists on claims. Whether the accusations are true or not, this is simply the common dangers faced by professionals and businesses that provide professional services.
- Negligence – failure to act responsibly and with care that results in damages.
- Dishonesty – may refer to cheating, lying, or stealing.
- Loss of Documents – the incurring of loss or damage to valuable documents or date owned by the client.
- Intellectual Property – the infringing of patents, copyrights, trademarks, and other intangible property that are a result of creativity.
- Civil Liability – legal obligations from breach of contract.
The premiums involved when getting professional indemnity insurance depends on the risks involved by the business or the professional. Nevertheless, the benefit brought about by having such insurance will surely compensate the cost of the insurance premium. This makes professional indemnity insurance an invaluable investment for professionals and/or businesses as it provides them with financial protection and security and that it also helps in saving their professional interest and reputation. If you provide professional services to clients, then it is in your best interest to invest in such insurance protection.