If your business or profession involves providing advice to clients or selling your own skills and knowledge, then you need to get a professional indemnity insurance (PII). This type of insurance helps protect experts in their field or professionals against negligence related lawsuits. It covers the expenses of legal defense and other damage costs. In other words, PII serves as a professional’s safety net while working in a very litigious environment.
A PII policy is considered as a crucial resource for professionals who collect money from clients in exchange of their professional opinion, advice and services. Professionals like financial advisers, fund managers, brokers, accountants, architects, contractors, software consultants and advertising agents are all required by law to be properly insured. This is because their professions are prone to lawsuits filed by their dissatisfied clients .
Every individual who practices his profession should perform his job with the best of his knowledge and skills. Otherwise, he can be held accountable for the loses and damages incurred by his costumers. Clients have the right to sue a professional on the grounds of misrepresentation, inaccurate or false advice, negligence, violation of good faith and unfair dealing.
Facing a lawsuit can be financially distressing especially when you’re at the losing end. The legal expenses alone can be a huge burden even if the defendant is not proven liable for damages. A professional indemnity insurance for accountants for instance, assures the defendant that he won’t lose all of his assets just because he made a client of his very unhappy.
Indemnity Insurance policies protect professionals for damages given a wide array of situations. These include patent or copyright violation, loss or destruction of important data, unauthorized usage of information, libel and slander. Other policies also incorporate protection against fraud and malicious actions executed by employees and subcontractors.
There are several factors to consider in identifying the cost of an indemnity insurance policy. Such factors include the type of business, possible risks in a given profession, income of the professional, etc. Just like other insurance policies, the premiums generally depend on the extra payable and the total amount covered by the insurance policy.
Professional Indemnity Insurance policies provide different options to different types of professionals. This is why in order to ensure adequate coverage at a reasonable price, it is best to consult an experienced broker and get a number of quotes from different policy providers.