Professional Indemnity insurance (also known as PI insurance) is an insurance cover designed to cover businesses and you against claims of breach of confidentiality, professional negligence, and several other errors. This type of insurance is especially crucial for companies (and anyone) that offer professional services, advice, consultancy, and designs, among others. Examples of professions that require professional indemnity insurance include migration agencies, health and fitness experts, business consultants, IT consultants, architects, and designers. In addition to protecting your business from potential lawsuits and allegations, most clients and regulatory bodies will have professional indemnity insurance as a requirement before they can work or do business with you.
Top Four Reasons To Get Professional Indemnity Insurance
1. Financial Protection
Lawsuits are any business’s worst financial nightmare. Many companies lose thousands of dollars (or even more) to lawsuits in one way or another. In most cases, the business might have to cease operations for some time until the case/matter is resolved. This not only translates to lost revenue, but expenses linked to the same, including court costs, legal fees, filing legal papers, and compensation (if ordered to compensate). All this can be avoided with an adequate professional indemnity insurance cover from reputable insurance agencies such as professionalindemnitycover.ie. The insurance policy covers all financial costs that could arise from error and omission claims. Such protection gives you, and the company, peace of mind to continue operating without worrying about going bankrupt from lawsuits.
2. Peace of Mind
While most people can work under pressure, a lawsuit can be unsettling especially if your reputation and profession are on the line. Although you can get away with a few mistakes, some of these can be quite costly. Professional indemnity insurance however helps take the burden off your shoulders, enabling you to focus on running your business without worrying about potential lawsuits. This is particularly important if there’s already a claim against your company or profession. The insurance policy will come into effect to cushion you from reputational loss, or financial loss especially if you or the company are held responsible. With the burden taken off your shoulders, you can breathe with peace of mind knowing the insurance company will take care of everything.
3. Boosts Credibility and Reputation
Many companies and individuals (clients) will only hire experts with a form of professional indemnity insurance. The clients want peace of mind and assurance as much as you do, another reason they would prefer working with a company/person they consider ‘safe’ to work with. Professional indemnity insurance is thus your scorecard to boosting credibility among potential and loyal clients, and is good for your reputation too. Investors and clients will be at ease for as long as they know everything is insured. That said, more and more clients will prefer working with you rather than an uninsured company. It would thus be advisable to shop for the best PI insurance provider locally for even better results.
4. To Cover Long Term Liabilities
One of the perks of owning a consultancy firm or owning a business is the freedom that comes with the title. In addition to running the business, you may decide to switch professions, retire, or sell the business when the time is ripe. Unknown to many, you can be found liable especially if there was an issue (error or omission) during your time as the owner. The only way to protect yourself (and the business) from this is to ensure the business is insured from the get-go. Many have lost their fortune from lawsuits years after they sold their companies, a path you do not want to take. Under normal circumstances, professional indemnity insurance will have your back even after you are done with the business. Liabilities that come after will not fall under you, but will rather be handled by the insurance company at that time. You however might have to negotiate for extended long-term insurance coverage when selling the business. This is the only sure way to avoid ‘issues’ that could arise a year or two after departing.
Professional Indemnity insurance plays a crucial role in shielding you from financial strain from lawsuits and goes a long way in boosting your business’ reputation. Unlike other types of insurance, PI insurance is and can be considered an investment for the business. The insurance cover alone is enough to earn the business’s trust and reputation among potential and current clients. This insurance cover can also help the business thrive in the competitive business arena, especially where large corporations have dominated for years. You however should window shop for the best insurance provider for the same. Compare quotes from different well-known and reputable insurance companies before settling on the best and most affordable one. The rule of thumb is to consider companies that have been in service for at least 3 years, and with good reputations too. Be sure to check customer reviews and ratings before settling on one.