What is professional indemnity insurance?

Professional indemnity insurance is a type of insurance that will protect a business from any claims made by a seemingly displeased client or customer. For instance, anyone who earns a living from providing advice, creating or offering a similar sort of service will be looked upon by their clients as an expert in their field. As they hold you in a higher regard than others in an alternative industry they will usually have extremely high expectations. As we live in a world of heightened consumer rights and awareness people are usually quick to question or doubt the level of service they receive. Often the expectations of a client are unrealistic and they attempt to claim against you for inadequate services. Professional indemnity insurance protects you and your business from this.

A claim or complaint can have an extremely negative impact upon your business. It can be detrimental to profits and finances whilst damaging an established reputation. Often a simple, minor error or misunderstanding can escalate into a critical disagreement between you and your client. Indemnity insurance protects against a number of things. These include; negligence, such as a confidentiality breach, loss of documents or data that are damaged, stolen or lost and libel and slander which can result in your business receiving bad press.

As all businesses are different the type of indemnity insurance coverage needed will be specific to you. The best advice is usually to take out as much professional indemnity insurance as you can possibly afford. Some people regard indemnity insurance as an unnecessary cost but countless professional business men and women have had firsthand experience of how detrimental claims can be presented by any client. With the amount of money being awarded in courts as compensation increasing it is good practice to protect your business as thoroughly as possible.

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