Does My Business Need Professional Indemnity Insurance?

By SiliconIndia   |   Tuesday, 06 November 2018, 05:23 Hrs
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As a business owner, you will have multiple different insurance policies to protect you in the event of accidents. One such policy you will have heard about is ‘professional indemnity insurance’. Mistakes happen all the time in business and a policy such as this will help you deal with them.

Does My Business Need Professional Indemnity Insurance?

In the UK, business insurance packages include professional indemnity insurance to cover and protect businesses against clients claims that there is an issue with the work they’ve carried out. As detailed by Hiscox, you may need indemnity insurance policies if you provide advice, have access to clients’ confidential information, or if you provide a professional service that could be challenged.

I am a Sole-Trader

As a sole-trader, any claim made against you would have to be settled using your personal funds. This could result in you having to sell personal assets such as property to be able to pay the debt, potentially leaving you completely bankrupt. Having a professional indemnity policy will stop this from happening and allow you to pay any fees in the knowledge that your financial future is secure.

I am a Professional Practitioner

Some industries have a mandatory legal requirement for anyone running a business within the industry to have professional indemnity insurance. Such industries can include solicitors, accountants, and healthcare providers. This will cover you against any lawsuits that could be brought about through many different avenues,such as professional negligence or data loss, or concern over duty of care. These can all lead to costly lawsuits and compensations, which you may not have the capital to contest on your own.

I Own a Consultancy Business

If you own a business that offers any sort of advice to clients, from financial advice to IT consulting, you should have professional indemnity insurance. This will protect you in the event your clients lose money and blame you for the loss.

Check the legislation around your business. If you are legally required to have professional indemnity insurance, you will need to take out a policy or risk your business’s accreditations being removed. Such businesses include accountancy firms and chartered surveyors.

I am Required to By Contract

Sometimes, professional indemnity insurance is required before lucrative business contracts are launched. Many high-profile clients will only use a company’s services if they have a professional indemnity policy in place, as it affirms to them that this is a serious and professional company.

I Need Peace of Mind

It is an extremely versatile policy that can be used to cover a vast range of problems, including intellectual property violations and mishandling of information. With professional indemnity insurance by your side, you know that you can focus on running your businesses perfectly, as you have the necessary means to protect yourself in the event of a lawsuit.

Mistakes always happen in business; no matter how careful someone is, an error is bound to pop up. To ensure the continued financial success of your business, look into professional indemnity insurance.

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