When you are running a small business creating a positive impression to your clients is essential. Unfortunately, when you run a business that provides advice or a service there may come a time when things don’t go to plan and a client is dissatisfied with your business’ services. They may have suffered a loss or incurred damages due to an act, omission or a breach of professional duty by you during the course of your business activities.
The threat of a potential claim can not only have a devastating impact on your financial situation, but also to your reputation. In today’s economic environment this is a common reality, something which your business needs to have protection for.
It costs time and money to defend yourself against a claim. You could be faced with forking out hundreds of thousands of dollars (if not more) if there is a demand for compensation. Even if you are not found liable, the costs of defending your case could severely impact your business.
This is where Professional Indemnity insurance (PI) provides protection for yourself and your employees. PI cover gives you peace of mind knowing that you will have the funds to defend the claim and pay any compensation awarded.
Professional Indemnity insurance is designed to provide cover for legal costs and claims for damages that may arise from an act, omission or breach of duty during the course of your business activities. It will also cover any associated investigation costs from professional bodies.
A Professional Indemnity insurance claim could occur from negligence while performing your professional services, resulting in a third-party experiencing a loss, either financial or physical including property damage and personal/bodily injury which is not covered by the ACC.
Some examples of how a claim for negligence may occur include:
When it comes to selecting the right level of PI cover to suit your business there are a few things you need to consider. These include:
Review your insurance regularly to assess the risks you are exposed to and ensure you have the right level of cover in place to protect your business.
Like most insurance policies there is no such thing as a one size fits all, with each and every business having their own unique risks and needs. These are some of the key factors that can impact the pricing of a Professional Indemnity Insurance policy:
The traditional professions associated with taking out Professional Indemnity insurance such as doctors, lawyers and accountants have shifted to include many more different types of occupations.
On average, business owners paid $76.25/month for their Professional Indemnity Insurance in 2018.
As more businesses provide professional services and give advice, it becomes a requirement to protect against legal costs and claims that may arise for damages caused from a breach of professional duty.
To receive an accurate quote for how much a Professional Indemnity insurance policy may cost your business, simply click on the button below to compare quotes.