Most of the professionals work tirelessly for our clients, advising, creating, managing or simply mentoring to bring about the best results. These results are brought about by first understanding the requirements of the client and then their expectations they have about the services we provide. Then these professionals, who can be employed in a firm or self-employed, offer their services in order to match up to the expectations of the client. Most of the times it is a smooth sailing and other times with some hiccups the professionals are able to touch the finish lines. At such times one may not think about buying professional indemnity insurance since the individuals is sure about himself and the client. But this mutual trust may not apply for all the clients.
There are some instances where the service delivery is absolutely not up to the mark and the client is really unhappy. At such times the payments are withheld or penalties are charged and further work is stopped. There are a few who go the extra mile and take the provider to court over the financial loss due to the delivery of service. As a professional you should be prepared for these few occasions since the demand of time and money is really high. Professional indemnity insurance can be your best aid at such times of distress. It provides adequate cover for the out of court claims made for compensation against you. In case the client proceeds to the court then the expense of the litigation and the final payment if any is also taken care.
As you would have understood, this is a complex insurance cover. You should disclose all the facts about the kinds of projects you undertake and the clients that you deal with. This information is vital in the company providing professional indemnity insurance to accurately understand the risk and price it. This will also allow the insurance company to correctly fix up a coverage amount for you. The professional indemnity insurance would cover the following risks for you:
o Claims made for negligent act, omissions or errors
o Infringement of intellectual property rights, like trade mark.
o Acts of dishonesty by anyone employed or contracted by you
o Loss of data or documents
o Any attempt of defamation.
o Some also cover the civil liability
The level of cover assigned to you in professional indemnity insurance would depend upon:
o Size of the project contract and the client being handled.
o Potential cost of defense
o The total compensation that may be awarded against you
The truth is such claims are being made everyday, some, you are aware of, and some you are not. The reality is that since it has not happened to you hence the danger seems far away. It would therefore be wise for you and your business to have such a cover at your side which immune you sudden financial jolt such as these.