Professional Indemnity Insurance is a form of insurance that provides protection to businesses and professionals who provides professional services for clients. Although there are only a few professions that are mandated by law to have this insurance, it is something that others in the professional services industry should have as it provides the necessary insurance coverage protection to protect you and/or your business from lawsuits coming from clients who are not satisfied with the services you have provided.
Legal proceedings and court litigations are very costly. If you get sued by a unsatisfied client, if you do not have professional indemnity insurance, you will need to shoulder all the costs of the lawsuit. However, if you have professional indemnity insurance, it is the insurance company you are insured with who will cover the costs of the lawsuit.
Professional indemnity is actually very easy to understand. It is a form of insurance that is designed mainly for the protection of businesses and professionals who provide professional services. Due to this, there is actually no reason why professionals and businesses that provides such will have no coverage. Litigations are very common in this day and age so it is only proper that you are properly covered.
The finances of most businesses are very delicate and unwanted business expenses like lawsuits can injure any business’ profits. If a client make claims and sue a business over faults with the services they have provided, it is in the best interest of the business to provide legal defense. If they are not properly insured, they will need to should all the legal expenses of the lawsuit. This is why for businesses, it make sense to invest in indemnity insurance as it is relatively much affordable to buy than to accommodate the costs of the lawsuit.
Professionals like accountants who provide professional services would also benefit in having professional indemnity insurance. The work that they do is never an easy one and can easily confuse those who are not accustomed to their trade. Sadly, a simple mistake on their part can be catastrophic not just to their clients, but the government as well as due to their involvement with the taxations of the client’s businesses. A lawsuit made to them can be a great loss to their finances which is why it is vital for them to have professional indemnity insurance as this helps in covering legal expenses should they encounter any lawsuits from clients.