There are a lot of industries, each having many company professionals and a number of clients. With so many professionals servicing so many clients, there are bound to be some mistakes made. The client may face a financial loss due to breach of contract, omission of certain clauses or professional negligence in the services provided. In such a case, the client may take a legal action to cover the losses. In this case, professional indemnity insurance protects the assets and more importantly, the reputation of the company or business involved.
This insurance has been designed for professionals who usually provide service or advice to clients. These people are more prone to miss out certain terms due to which they may fall into legal issues. The pi insurance protects the professionals from claims and costs to damage to third parties.
Why does a professional need this insurance?
Protecting and defending a professional from claims and costs may cost the individual time as well money. Moreover, whether the claims are founded or not, it usually damages the hard-earned reputation of the professional and consequently the business or company associated to him. It may in fact affect not only the concerned professional but also the associated partners, employees and volunteers.
In such a case, cover up of such allegations with the help of indemnity insurance is not only of utmost importance to defend and safeguard the business as well as provide the costs to cover the defending action. This helps one to carry on the business with confidence that assets as well as reputation are well protected.
Who needs such insurance?
If the company is associated with selling skill knowledge which is the usual case for business related to design, providing advice, dealing with specifications or concerned to supervision, the company is responsible and has a duty towards the customers and third parties. Professions like architects, solicitors, insurance brokers, accountants, financial advisors usually require the person to have professional liability insurance. There are others like ones connected to advertising and PR agencies, consulting engineers and designers who choose this insurance to protect themselves in the event of a claim rising.
Who is covered by the insurance?
The professional’s liability is usually unlimited in amount and extends over a considerable period. On the other hand, the insurance operates for only a set period and is limited to a certain amount. Also, it can be used only when a claim has been made against the company. The advantage of professional insurance is that it defends not only the business but also any employee, partner, director or a related individual whose service was associated to the claim that has been brought up.
There may be gaps if the professional indemnity coverage is not renewed on the day it expires. This may lead to harsh consequences as there is no coverage for any business prior to the new effective date. Claims made during the policy periods are only covered so whether or not a business is conducting business during a certain period, being covered is the best choice.
professional insurance is the best way to make sure that any claims by clients due to misinterpretation or errors on side of the professionals do not create a huge loss to the company or damage its reputation.
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Professional indemnity insurance is the best way to safeguar