Whether you’re an expert architect, an IT mastermind or sharing your pearls of wisdom as a life coach, Professional Indemnity insurance* is something that you need to consider to help safeguard your business. Your clients rely on your professional advice and expertise, and even when you put all the measures in place to deliver a high standard of service, unexpected claims can still occur.
Professional Indemnity insurance is something that any business that provides specialist services or professional advice needs to consider. Let’s take a further look at the nitty-gritty of all things Professional Indemnity insurance.
What is Professional Indemnity insurance?
Professional Indemnity insurance is designed to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice. Professional Indemnity insurance can also assist with the legal costs associated with responding to or managing claims which are covered by the policy.
What kind of professions need to consider Professional Indemnity insurance?
Professional Indemnity insurance is there to protect those who give professional advice or services. There are many different types of professions which fall into this category, so we’ve narrowed it down to just a few of the typical ones which may require it.
- Allied health professionals
- Civil Engineers
- Disability workers
- Finance and Mortgage brokers
- Hair and beauty services
- IT Professionals
- Land Surveyors
- Marketing specialists
- Massage and alternative therapists
- Migration agents
- Personal trainers
- Pet professionals
- Project managers
- Real estate agents
- Recruitment consultants
- Social workers
- Tax agents
- Yoga teachers
Part of your responsibility as a professional is to deliver appropriate and professional advice that suits and help your client’s needs. This could be anything from engineers providing advice on a new structure to personal trainers creating a custom exercise plan for their client.
Your Professional Indemnity policy is there to provide financial protection if a client were to make a claim against you for negligent acts or an omission in the delivery of your professional advice or services.
Why do I need Professional Indemnity insurance?
Take a moment to consider the time and money that is involved with a claim. The financial impact could not only destroy your business finances, but you may also put your personal finances in jeopardy too.
Is Professional Indemnity insurance a requirement?
Depending on the industry you operate within, Professional Indemnity insurance may be a requirement to become a member of certain industry boards and bodies. It is also a common requirement for those undertake contract work, with minimum levels of cover often outlined.
What does Professional Indemnity insurance typically cover and exclude?
Some of the things your Professional Indemnity insurance policy will typically provide cover for include:
- Payment of compensation as a result of a claim, including but not limited to Court awarded damages
- An award of legal costs against you
- Reasonable legal costs incurred in defending or responding to the claim
- Claim investigation costs
- Disciplinary proceeding costs
What does Professional Indemnity insurance not provide cover for?
These are some of the instances when your Professional Indemnity insurance policy will typically not provide cover.
- Claims and circumstances known prior to inception of the policy
- Contractual disputes
- Disputes in relation to your professional fees
- Personal injury or property damage (unless caused by a breach of your professional duty)
- Intentional damage
- Fraud or dishonesty
What are some examples of Professional Indemnity insurance claims?
Professional Indemnity claims can come from regular everyday business activities like giving incorrect advice, a miscalculation, inappropriate diagnosis or treatment. It can also include things like blowing out a budget and not delivering on deadlines that you may have promised your client on a project.
This is a real claim example of when Professional Indemnity insurance provided financial assistance to an architectural business.
An architectural design business was contracted to design and draw measurements for a client’s custom home renovations. The client alleges that the drawings prepared by the architectural business are incorrect. The client seeks damages for the alleged miscalculation of the roof measurements amounting to $500,000.
How much does Professional Indemnity insurance cost?
The cost of your Professional Indemnity insurance policy is determined by a variety of factors which are unique to your business. Things like the type of operations your business performs and the level risk your business is exposed to can impact the pricing of your policy.
These are some of the factors that impact how the price of your policy is calculated:
- Your business revenue
- Size of your business
- Amount of coverage required
- Who is being covered by the policy? Are they qualified to perform the job?
- Claims history
Get a quote for your Professional Indemnity insurance today
Find out more about Professional Indemnity insurance and how you can start protecting your professional business with BizCover today.
At BizCover we believe that getting your business insurance sorted shouldn’t be a hassle. We provide a range of competitive insurance options including Professional Indemnity, Public Liability insurance, Business Insurance, Cyber Liability, Management Liability insurance and many more.
Jump online or give us a call to receive quotes from a great range of trusted leading insurers. Once you’ve selected your policy options, we will deliver all your documents straight to your inbox, with no mountains of paperwork to complete.
^The provision of the claims examples are for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Cover for a claim will depend on the specific circumstances around the loss and would be subject to the terms and conditions of the policy concerned.