A Guide To Professional Indemnity Insurance

Article Written By: Michiel Van Kets

Any business needs to be protected against negative accusations which may be unavoidable when working with clients where disputes will arise. Professional Indemnity Insurance is imperative for some professions including doctors, lawyers, insurance brokers, mortgage intermediaries and financial advisers.

Negligence is the basic coverage and is defined by the failure to act in a way that a reasonable person would act. This reasonable person is hypothetical and is the scale that is used to measure other people's actions. This usually includes breach of duty where a business or person fails to deliver an agreed requirement or when the health or safety of a client is involved. Dentists, doctors, drivers, manufacturers of consumer products and financial advisers all affect the health or safety of clients.

Civil liability determines fault that is not a criminal act. It includes responsibility for breach of contract or other payments not made. It also includes libel and slander.

Intellectual property disputes involve the disregard or denial of a legal right or binding agreement. This usually involves copyrighted or patented material inadvertently used illegally including artistic and literary works, symbols and logos, inventions and photographs.

Loss of records or data includes the property of the client that an employee, for example an accountant, failed to store correctly, and for this reason was deleted or stolen.

For this kind of professional protection the cost of insurance premiums may be high, but the benefits in the case of a lawsuit are well worth the monthly cost. A lawsuit could ruin your business and reputation. The kind of coverage depends on the type of business. All insurance companies do not offer Professional Indemnity Insurance, and a reliable insurance broker will tell you if you need to have it.

If it is determined that your business or consultancy needs this protection, the broker will be able to create a customised package that includes the specific type of coverage you need. They will determine the circumstances that will be covered, how large the policy should be and the risk factors. In such cases, it is considered good to get all your insurance needs from the same insurance company. This way, all claims are handled by the same company and they will usually give a discount.

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Michiel Van Kets - Professional Indemnity Insurance.

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