If you are the owner of a business that offers professional services to clients, you need to protect yourself as well as the business from claims of negligence, inadequate service or incomplete service. The best way to do this is to get professional indemnity insurance, also known as professional liability insurance.
Professional indemnity insurance is a business insurance policy designed to protect businesses in the service industry from claims of negligence, incomplete service, inadequate service or wrong services. For instance, a client can sue a t-shirt printing company for printing wrongly-spelled words on thousands of t-shirts they had ordered. A patient at a dental clinic can also sue the dentist for removing the wrong tooth or performing root canal on the wrong teeth.
Businesses with professional indemnity insurance can be assured of coverage when sued by their clients. The policy covers the cost of legal services and any damages that may be awarded. This means that the business will not be exposed to financially-crippling lawsuits.
For instance, if you are sued by a client for negligence the provider of your professional indemnity insurance will help you find a suitable lawyer and try their best to win the injury lawsuit. If successful, the insurer will pay the legal costs only. If unsuccessful, your insurer will pay your lawyer as well as the damages awarded by the court. As you can see, any business owner who carries professional indemnity insurance is protected from all liabilities that may arise from negligence, errors or omissions.
When to Buy Professional Indemnity Insurance
Professional indemnity insurance is perhaps the most important business insurance policy that business owners should get. While you can operate without this policy, your business may be crippled or bankrupted in case one or more clients decide to file an injuries lawsuit. This is because the cost of legal defence in injury lawsuits is usually around $100,000. Paying the damages awarded by the court might force you to file for bankruptcy. To avoid all these risks, you should look for a suitable insurer and buy a professional indemnity insurance policy.
If your business offers services to the public, you need to purchase professional indemnity insurance as soon as possible. This is because any additional client you serve without insurance coverage is one potential lawsuit that may cripple your business.
Choosing an Insurance Provider
There are many insurance companies that can underwrite your business’s professional indemnity insurance. Since they are all different, it is crucial you do some research to find the best insurer and insurance policy for your needs. Obviously, the cost of premiums, coverage limits and exclusion clauses are the most important factors to take into consideration during your research.
Importance of Working With a Business Insurance Broker
There is a lot of information for you to sift through when conducting your research. That is why it is recommended you consult a business insurance broker from Smart Business Insurance. Ideally, you should only consider working with independent insurance brokers. This is because they have your interests at heart, and not those of insurance companies.
Insurance brokers can provide you with a lot of accurate information and assess your liability protection needs. They can also help you find the right insurer for your needs. In addition to that, they can act as mediators when you have an issue with your insurer.