Do I need Professional Indemnity insurance?
As a professional, it’s important to have Professional Indemnity Insurance to protect you and your business against claims made by your clients for things like negligence, malpractice or professional misconduct.
Before you offer your first words of wisdom, it’s a wise idea to check whether your industry professional body or regulator requires you to hold Professional Indemnity (PI) cover. Some professions in Australia, like accountants, real estate agents and architects, have a mandatory industry requirement for a professional to have a PI policy.
You’ve no doubt put in the hard-yards in to become great at what you do, from completing required studies to building up a loyal client base, eventuating to the opening of your own small business. But all it takes is one allegation from a client, regardless of whether you’re at fault or not, to potentially send your business crashing down.
There are many reasons which could result in a claim being made against your business, including:
- Failure to deliver on promised services
- Negligence in executing your professional services
- Delivering incomplete, careless or incorrect work
- Making mistakes, oversights or accidental omissions
Protecting your back pocket and reputation
Whether prepared for it or not, a claim must be defended – ignoring it won’t go away.
Don’t despair. Professional Indemnity insurance is your best defence when faced with a claim. You get the assistance of an expert insurer by your side to protect your finances and safeguard your reputation, as well as providing peace of mind knowing you’ll still have a business when it’s all over.
What does Professional Indemnity Insurance cover?
Professional Indemnity insurance typically foots the bill for things like:
- Legal and defence costs
- Related claims investigation costs including those by a professional body
- Court attendance costs
- Compensation costs awarded to the claimant
- Public Relations costs
Did you know?
In many instances, the costs of defending a claim far outweigh the costs of the actual compensation awarded, particularly for cases that take several months or years to defend.