Professional Indemnity Insurance - Why do I need it?

Business Insurance

Professional Indemnity insurance is necessary for anyone who provides advice or a service to their clients or customers. Professional indemnity protects you and your business against claims and legal costs for damages caused by acts, omissions or breaches in the course of providing your service. As a result of one of these acts, your client or customer may suffer a financial loss or for injury which they may hold you legally responsible.

A claim may be made  against malpractice, professional misconduct or breach of duty. Any of these claims can prove disastrous for your business. Without the right professional indemnity insurance, you and your business can suffer significant financial hardship as a result of the time and cost associated with defending a claim.

Do I Need Professional Indemnity Insurance?

Professional indemnity insurance can be tailored to suit your profession. The following is a list of the main professionals who usually take out a professional indemnity insurance policies.

  • Accountants
  • Architects
  • Barristers
  • Builders
  • Engineers
  • Management Consultants
  • Photographers
  • Project Managers

There are however many other types of professions that need a professional indemnity policy. Contact Knightcorp to talk to a broker experienced in professional indemnity insurance to understand the risks associated with your profession.

What Does a Professional Indemnity Policy Cover?

The following incidents are the main reasons for needing professional indemnity insurance:

  • Breach of duty
  • Unintentional libel, slander and defamation
  • Unintentional infringement of copyright, plagiarism, a trademark, design or patent
  • Loss, damage or destruction of documents or records in your control and reasonable costs to replace and restore the documents
  • Unintentional breaches of the Trade Practices Act
  • Any actual or alleged dishonest, fraudulent, malicious or criminal act or omission by an employee.

Not all policies are created equal. Some professional indemnity insurance policies have limitations and exclusions on certain types of work or services that are not covered. Use a professional broker who understands your industry and business, before taking out a policy.   

Do you hold a membership to a professional industry body?

If you are a member of  your profession’s industry body, you may be required to hold a current professional indemnity insurance policy to be a valid member. If you let us know which organisations you are a member of, we can make sure you have the right level of cover to satisfy your membership requirements.

Business Insurance Packages

Those individuals who require professional indemnity insurance may also require product liability insurance and public liability insurance. These insurances can be bundled into one business insurance package.  

Product liability insurance covers you for claims of personal injury and property damage caused by your product. Public liability insurance covers your business in case a client or member of the public sustains an injury or your business causes property damage to an individual or another business' assets.

Don’t allow your business to be one of the statistics of  rising professional indemnity claims. If you would like some advice about whether you need professional indemnity insurance or whether your current policy is right for your business, call Knightcorp on 1300 656 001.

Category: Business Insurance

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