Pi Insurance Can Protect You From Claims Made By Clients
If you are an architect, solicitor, accountant or one whos in the business of providing
professional services, you should have adequate coverage of Professional Indemnity Insurance (PII). It will protect you from any claims made by your clients just in case they suffer a financial loss due to errors and misjudgment on your part.
What Does Professional Indemnity Insurance Cover?
Such a policy covers for the hefty cost of compensation claimed by your clients. The coverage also includes the cost you will have to incur when defending the claim. So, whether youre a mortgage consultant, a financial advisor, a designer or one who runs a PR agency, this policy is sure to benefit you in case of claims for damage made by a third party due to your negligence in the services they have received from you.
Is It Legally Mandatory to Choose Such A Policy?
Some professionals like financial advisors and accountants are not allowed to operate legitimately unless they opt for PI insurance. Members of a trade association are also required to go for it.
In case you are working with third party business providers as part of your professional service, you should purchase such a policy. The third party business will expect you to be adequately insured before they sign a contract with you. This is because any claim made against you can affect their business as well. So, prior to offering professional services and getting into business deals with third parties, you should read your state laws on professional indemnity insurance.
What Are The Tips to Follow When Choosing This Policy?
When you decide to purchase this policy, follow the tips given below so that you get the benefits of this coverage.
Choose the right insurer: Whether you deal with an insurer or a broker, make sure he offers policies covering a variety of trades. It is better to choose an insurer or a brokerage firm that is recognized by the Financial Services Authority.
Find out if youre sufficiently covered: PI insurance is offered on a claims-made basis, which means that it will cover claims made while the policy is live. Thus, if you choose to terminate your policy at the time of retirement, your insurer will ask you to arrange for run-off coverage for a certain time period. The run-off coverage is also required when you decide to change your insurer. In this case, you may otherwise have to get an agreement signed by your new insurer, which will allow you to accept new claims for previous damages.
Make sure your documentation is complete: Even though youve purchased the insurance policy, you can avoid paying the claims if you have proper documentation of your contract with your client. This will help you deal with the complaints of loss in a better way. Just ensure that you maintain records of your work done for clients so that any dispute can be sorted out without having to compensate the claim through PI insurance.
by: Insurance
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