Figuring Out Professional Indemnity Insurance
Figuring Out Professional Indemnity Insurance
A slow economy combined with stagnating wages and rising living expenses are the primary reasons why an increasing amount of Americans are leaning towards self employment. Whether the home based business is accounting, financial advising, or senior care, it's necessary to protect one's assets from potential client lawsuits. This is why more entrepreneurs are purchasing professional indemnity insurance.
What is Professional Indemnity Insurance?
Professional indemnity insurance is a form of specialized liability insurance which protects business owners in situations where property or personal damage may occur to a client due to negligence on the business owner or employee's part. It covers any losses and thefts caused by employees, helps cover lawsuits, and works as a form of malpractice insurance. Professional indemnity insurance protects the entrepreneur from dissatisfied client disputes which may potentially ruin a business.
What Does This Insurance Cover?
Although the details of coverage may vary depending on the insurance provider, professional indemnity insurance typically covers the following customer disputes:
-Any intellectual property, data, or information lost due to theft or negligence
-Careless acts or mistakes which may lead to personal damages to the client or client's property
-Any form of theft, or negligence on the business owner's part
-Civil liability (IE breach of contract)
The main reason business owners consider purchasing this type of insurance is due to it's coverage of lawsuits. All the expenses are taken care of, even if you lose the case. Professional indemnity insurance covers settlements, claims, and may eliminate the need for a court side appearance.
Who Should Get It?
Professional indemnity insurance is not for everyone due to the expense; it's primarily geared towards the service industry. Health care professionals, financial advisers, lawyers, and insurance providers frequently take advantage of this coverage. Despite the cost, the policy pays for itself by ensuring the business does not suffer unnecessary losses in the event of an expensive settlement. Since no two businesses are alike, it's best to speak with your local insurance representative to discover if this type of insurance is a good fit for your business. (Learn about Aviva, also make sure to visit MLC Life Insurance policies.)
How Much Does It Cost?
The cost of professional indemnity insurance varies depending upon the type of business, amount of coverage, and any additional liability requirements involved. Take the time to go into detail with your insurance representative to ensure specific business requirements are included in the policy. On average, expect to pay up to one percent of your coverage. Professions which are considered high risk should expect to pay steeper premiums. On another note, ask your local representative whether it can be combined into a packaged deal with your auto insurance, home coverage, etc. This will often lead to a better price, and will save money in the long run.
Professional indemnity insurance is a wise investment for anyone considering self employment or who is employed in fields with high potential for lawsuits (i.e. health care). It protects your business assets as well as professional reputation. Much like a Kevlar jacket, this type of insurance is a preventative measure which will ensure a thriving future for your business.
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