Professional indemnity insurance protects companies against claims made against them by dissatisfied clients. No one likes the think about upsetting or angering clients, but no matter how good a service you offer, it can happen; accidents occur and also people sometimes resort to libel. Whilst you cannot be sure you will always prevent such situations occurring, what you can do is protect your business against the effects and financial repercussions.
Indemnity insurance is particularly important for companies offering advice to, or acting on behalf of, third parties, just some examples of which include architects, solicitors, accountants, engineers, estate agents, IT Consultants and contractors. In the professional world, if a third party claims that you misquoted them, gave them guaranteed advice that failed to hold, or infringed on their rights, causing them damage or financial loss, the consequences for you can be crippling – enough to bring down businesses as well as individuals.
Today everyone seems to be aware of ‘their rights’ and ready to blame others when things go wrong, and this has resulted in more and more complaints being made against companies, even when what has gone wrong for the client is a business’s fault. Even though professional indemnity cover is not compulsory for most businesses, it offers a peace of mind that is well worth the cost of any policy.
If your company advises and works on behalf of others, protecting yourself against a number of legal eventualities, which hopefully will not occur, is one of the safest ways of ensuring your business is secured for the future. As a final word of caution, if you decide that you do want to invest in indemnity cover, be sure to look into any policy before making a commitment, as the extent of cover can vary between different insurers and will be important to find the right level of cover for your own unique business.