Understanding Professional Indemnity Insurance
Professional Indemnity Insurance is generally required by anyone who provides advice, in order to protect themselves and their business against potential legal actions by a person or persons who rely on that advice. Professional Indemnity is required in a number of industries including Professional Indemnity Insurance Bookkeepers, Professional Indemnity Insurance IT Contractors, professional indemnity insurance management consultants, and professional indemnity insurance recruitment consultants. Most contracts which service providers enter into, and indeed most tenders they participate in, require the contractor to have and maintain a minimum level of Professional Indemnity Insurance, and in some cases a minimum level of Public Liability Insurance. In some professions the law dictates that industry members maintain a minimum level of Professional Indemnity Insurance (e.g. Financial Services Businesses regulated by ASIC).
Once a person establishes him or herself as an expert in a particular field they can expect that all the customers they do work for will have high expectations from them and, in most cases, if the advice given turns out to be less then what the customer would expect it may lead to legal action against them. Take for example the case of an IT consultant who makes his living from advising companies which technical solutions to use and perhaps even orientate them towards effective security options. If for any reason, their advice, being relied upon by the company and in turn their client, leads to the client experiencing a loss, the client will look to be reimbursed by the company who in turn will look to make a claim under their professional indemnity insurance policy.
Professional Indemnity Insurance in itself is quite generic across different insurers, however there are a number of insurers offering professional indemnity insurance and there can be differences in cover provided by each, which only a competent professional indemnity insurance specialist can advise on. It is recommended that you seek out a specialist Professsional Indemnity Insurance Broker to advise you in purchasing this important cover as most policies tend to be very technical in their language and therefore difficult to decipher. This is recommended whether you require bookkeepers professional indemnity insurance, IT contractors professional indemnity insurance, management consultants professional indemnity insurance, recruitment consultants professional indemnity insurance, or you work in a different industry where you provide advice (e.g. Tax Agents professional indemnity insurance, BAS Agents professional indemnity insurance).
In recent years many insurers have created specific professional indemnity insurance policies tailored to specific industries. These policies tend to provide more specific cover relative to the risks faced by each industry and therefore are preferred over generic professional indemnity policies. The internet is a great tool both for keeping informed and for finding the right insurance broker who can navigate the professional indemnity market to provide you with the right cover at the right price.
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