If you own your own small business, operate as a small trader or work as a freelancer, then professional indemnity may be an insurance policy worth considering.
When you own your own business, operate as a sole trader or work as a freelancer, you are (usually) solely responsible for any legal implications arising from your work, and any contracts you sign as part of performing a professional service will usually stipulate that all legal liability resides with you.
In this day and age, litigation is becoming more and more common, and any claims against you, be they legitimate or unfounded, typically require significant funds to investigate, defend and settle. The damage to reputation can also take a financial toll.
While you may be confident in your abilities and have a proven track record of satisfactory performance, that doesn’t cancel out the possibility of legal action being taken against you.
Professional indemnity insurance may not be necessary for you, but it’s certainly worth doing some research, having a chat to people in similar industries and situations as yourself and then making an informed determination about whether it’s worth considering for you and your business operation.
Professional indemnity insurance is all about litigation and helping to provide cover for any claims against you that relate to errors, omissions or acts by you in the course of your provision of professional services.
The types of claims for damages against you include, but are not limited to, the following:
While policies vary among insurers, some typical elements of professional indemnity insurance cover include the following:
What a professional indemnity insurance policy doesn’t cover will vary among insurers, but in general, the following are not typically covered:
You have a few options where professional indemnity insurance is concerned. You can purchase it as an individual policy or as part of a business pack insurance policy. If you belong to a professional industry association, some will occasionally offer professional indemnity insurance specific to your industry, this can be helpful as claims that arise can vary from industry to industry.
As with any form of insurance, it’s best to seek professional advice, so contact a broker or insurance professional for more information.
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