Professional Indemnity
As a business owner, you pride yourself on delivering the results your clients expect, every time. However, despite our best efforts, mistakes can (and do) occasionally happen. You don’t want to put everything you have worked so hard for at risk; this is why professional indemnity insurance is essential.
As a business owner, you pride yourself on delivering the results your clients expect, every time. However, despite our best efforts, mistakes can (and do) occasionally happen. You don’t want to put everything you have worked so hard for at risk; this is why professional indemnity insurance is essential.
What is Professional Indemnity Insurance?
Professional indemnity insurance provides cover for you and your business if you or your employees’ actions cause a loss for one of your clients. Often, it's what prevents a business with an error from losing everything.
As a business owner, you pride yourself on delivering the results your clients expect, every time. However, despite our best efforts, mistakes can (and do) occasionally happen. You don’t want to put everything you have worked so hard for at risk; this is why professional indemnity insurance is essential.
What is Professional Indemnity Insurance?
Professional indemnity insurance provides cover for you and your business if you or your employees’ actions cause a loss for one of your clients. Often, it's what prevents a business with an error from losing everything.
As a business owner, you pride yourself on delivering the results your clients expect, every time. However, despite our best efforts, mistakes can (and do) occasionally happen. You don’t want to put everything you have worked so hard for at risk; this is why professional indemnity insurance is essential.
What is Professional Indemnity Insurance?
Professional indemnity insurance provides cover for you and your business if you or your employees’ actions cause a loss for one of your clients. Often, it's what prevents a business with an error from losing everything.
As a business owner, you pride yourself on delivering the results your clients expect, every time. However, despite our best efforts, mistakes can (and do) occasionally happen. You don’t want to put everything you have worked so hard for at risk; this is why professional indemnity insurance is essential.
What is Professional Indemnity Insurance?
Professional indemnity insurance provides cover for you and your business if you or your employees’ actions cause a loss for one of your clients. Often, it's what prevents a business with an error from losing everything.
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Is It Mandatory for All Businesses?
There are some fields where a professional indemnity policy is required. These include:
- Medicine
- Financial advising
- Accounting
- Law
The precise details of mandatory cover vary from state to state. Additionally, a professional indemnity policy is typical for those working in a profession where:
- They are part of a collective organisation
- They offer advice to clients
- They are involved in teaching and training
- They create designs for clients
- A client has requested you have professional indemnity cover to take a contract
My Profession Isn't Listed Above, Do I Still Need This Type of Cover?
While your insurance professional can address your unique circumstances, it is often a wise decision for renters or lessees to get insurance cover for property and equipment. If you're unsure about your specific circumstances, contact our expert team today.
Here's An Example:
Hope leases a storefront for her day spa. While she does not own the building, she has a large amount of money invested in all of the equipment needed to serve her customers, as well as the items that make her spa stand out from the competition.Suppose a fire destroys the building. Most, if not all, of Hope’s equipment and decorative items will also be lost. If she does not have the necessary cover, Hope will experience a tremendous financial loss. The loss could be significant enough to force her to close her business permanently.However, if Hope has insurance that covers the property and equipment, she will be able to replace the things needed to operate her business.
Professional indemnity insurance is a highly recommended safety net for owners of all manner of businesses.
Accidents and unexpected mistakes are a part of life for everyone. Because you must be prepared for the unexpected, attaining this type of insurance cover will give you peace of mind and could save you thousands of dollars as well as your business’ reputation.
What Occurances Will Professional Indemnity Insurance Cover?
While specifics often differ from policy to policy, most professional indemnity insurance policies can cover:
Type of Cover
- Fidelity Cover
- Civil Liability
- Enquiry Costs
- Defence Costs
- Advancement of Costs and Expenses
Potential Benefits
- A financial loss incurred by a business as a direct result of fraudulent employee conduct. The employer must have found dishonest acts during the period of insurance.
- Legal obligations caused by private misdeeds or a breach of contract that is not a criminal act.
- The cost involved in defending the insured from an investigation of their professional actions by a regulatory entity.
- The price of defending a claim against the owner of the professional indemnity policy.
- Covers any extra costs accumulated during a claim.
What Are the Typical Exclusions of a Professional Indemnity Policy?
Expenses that your professional indemnity policy does not cover will depend on the individual policy. Generally, the following exclusions apply:
- Pollution
- Costs incurred because of fraud on the part of the insured
- Unpaid fees
- Commercial liabilities
- Third-party bodily injury and property damage
- Contractual liabilities
Case Study
A builder miscalculates the necessary supports to a foundation. As a result, the foundation slab cracks and there is damage to the property. Without professional indemnity insurance, the builder is liable for between $150,000 to the total value of the home. By carrying the necessary insurance, the builder will not have to pay out of pocket to repair damages. Please be aware this data is not a substitute for professional advice. It is an overview of topics frequently involved in professional indemnity insurance and is for informational purposes.
Safe Work Australia, Key Work Health Safety Statistics 2014
"Penalties awarded against companies and its directors or officers for work health safety breaches have increased by 43% to $22.3 million in one year. Penalties now average $62,000 per company."
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Did You Know?
Many businesses think it won't happen to them, but statistics show otherwise. In fact:
(Chubb 2016 Private Company Risk Survey)
The likelihood of a claim that could be covered by a Management Liability policy has tripled in the last five years, with 50% of notifications resulting in a claim.
Chubb 2016 Private Company Risk Survey
The most common claims are for employment practices like bullying, harassment and wrongful dismissal.
Chub, 2016 Private Company Risk Survey
Major claims by amount relate to crime - including employee fraud.
My Profession Isn't Listed Above, Do I Still Need This Type of Cover?
Professional indemnity insurance is a highly recommended safety net for owners of all manner of businesses.
Accidents and unexpected mistakes are a part of life for everyone. Because you must be prepared for the unexpected, attaining this type of insurance cover will give you peace of mind and could save you thousands of dollars as well as your business’ reputation.
What Occurances Will Professional Indemnity Insurance Cover?
While specifics often differ from policy to policy, most professional indemnity insurance policies can cover:
Type of Cover
- Fidelity Cover
- Civil Liability
- Enquiry Costs
- Defence Costs
- Advancement of Costs and Expenses
Potential Benefits
- A financial loss incurred by a business as a direct result of fraudulent employee conduct. The employer must have found dishonest acts during the period of insurance.
- Legal obligations caused by private misdeeds or a breach of contract that is not a criminal act.
- The cost involved in defending the insured from an investigation of their professional actions by a regulatory entity.
- The price of defending a claim against the owner of the professional indemnity policy.
- Covers any extra costs accumulated during a claim.
What Are the Typical Exclusions of a Professional Indemnity Policy?
Expenses that your professional indemnity policy does not cover will depend on the individual policy. Generally, the following exclusions apply:
- Pollution
- Costs incurred because of fraud on the part of the insured
- Unpaid fees
- Commercial liabilities
- Third-party bodily injury and property damage
- Contractual liabilities
Case Study
A builder miscalculates the necessary supports to a foundation. As a result, the foundation slab cracks and there is damage to the property. Without professional indemnity insurance, the builder is liable for between $150,000 to the total value of the home. By carrying the necessary insurance, the builder will not have to pay out of pocket to repair damages. Please be aware this data is not a substitute for professional advice. It is an overview of topics frequently involved in professional indemnity insurance and is for informational purposes.
