What is Professional Indemnity Insurance?

When you’re in the business of delivering advice and services to customers and prospective clients, trust and honesty is key.

However, no matter how much effort you put into pleasing them and achieving milestones, there’s always a risk of things not going to plan or expectations not being met. If this were to happen, you’d want to make sure that you, your employees and your business are protected. 

That’s where professional indemnity insurance comes in.

It doesn’t matter what type of industry you’re in – from education, accounting and advertising, to IT, real estate and sport – it just matters that you’re covered and not coming up against an expensive allegation or claim without policy protection.

Keep reading to find out all you need to know about this type of business cover…

What is Professional Indemnity Insurance?

Professional indemnity insurance (also referred to as professional liability insurance or errors and omissions cover) protects companies that provide services and/or advice for a fee.

It’s put in place to cover claims made against you and your business for an alleged mistake or breach that has negatively impacted or misled a client. It ultimately covers the financial consequences of neglect, an error or an omission made by yourself or your business.

When you take out professional indemnity insurance, it needs to be tailored to your needs, otherwise you’re at risk of a substantial loss of profits, not to mention harm to your reputation and legal fees if you are found guilty of causing injury, damage or financial loss to your client.

What does Professional Indemnity Insurance cover?

No matter how experienced, professional or attentive you are, mistakes and miscommunications can happen, and that’s why professional indemnity insurance is so important.

There are a number of claims that a client can make against you, including:

• breach of duty or security
• breach of their privacy or a confidentiality agreement
• intellectual property infringement
• providing incomplete or inaccurate work
• failing to provide a promised service
• giving the wrong advice
• making an error of judgement
• omitting important information
• bodily injury and/or property damage
• defamation
• lost or damaged documents

The right professional indemnity insurance cover should protect your business reputation and assets, provide protection against your personal assets and comprehensive claims against financial losses, cover against personal injury and property damage and an overall adequate level of cover (often starting at $500,000).

Who needs Professional Indemnity Insurance?

Basically, anyone who provides a service that is relied upon by another person or business should have professional indemnity insurance to protect them.

Here at B Insured Brokers, our professional indemnity insurance can cover a wide range of industries including accounting and consulting, advertising and marketing, health (chiropractors, optometrists, psychologists and physiotherapists), commercial and residential real estate, barrister and lawyers, training organisations such as TAFEs and universities, veterinarians, sporting facilities and equipment hire.
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Also, if you’re keen to cover yourself for claims of negligence (such as an injury sustained in a shop or office by a customer or client), it’s worth looking into taking out public liability insurance as well.