Professional Indemnity Insurance Features & Benefits
Essentials for all Professionals
Professional Indemnity Insurance is essential protection for professionals who provide a service, including design and advice.
Professionals are only human, and mistakes do happen. Any financial loss, injury or damage arising from a mistake or failure by the professional to exercise the required level of skill may mean that an award is made in favor of a person or company who suffers a loss, damage, or injury.
A professional may also be held liable for a mistake even though there was no negligence. Defense costs under the policy are made available to dispose of such allegations.
Who is a Professional?
A professional will hold themselves out as having a special skill, which can be relied upon by another. Consequently, the law requires that the professional exercise the required skill to an appropriate level expected by that profession.
Anyone who provides an individual or company advice and/or services of a skilful character (according to an established discipline) might be regarded as a ‘Professional’. That means persons other than those in ‘traditional’ Professions, such as doctors, lawyers, architects and engineers, are now considered to be ‘Professionals’, e.g. IT consultants, advertising agents, real estate agents, mortgage and finance brokers, management consultants, trade associations and fund managers.
Who can make a claim against you
Any third party, such as a customer, supplier, competitor, regulatory authority (including ACCC, ASIC, EPA), Industry bodies and others can make a claim against you, if they have allegedly suffered a loss due to negligence (or alleged negligence) arising from your professional services.
Claims can arise from various allegations, including:
- Breach of your duty of care
- Negligence / Common Law Matters
- Civil Liabilities
- Conflicts of Interest
- Breach of Confidentiality
- Competition and Consumer Act or similar commonwealth legislation designed to protect consumers
What does Professional Indemnity Insurance Cover
Professional Indemnity Insurance Cover provides indemnity for claims brought against you for financial loss, injury or damage arising from a breach (or an alleged breach)
of your professional duty in the course of conducting your business. Professional Indemnity Insurance aims to protect your assets in the event of a claim, to ensure you can still carry on your business.
The need for Professional Indemnity Insurance is not to be confused with Liability Insurance. Liability Insurance expressly excludes claims arising from advice or design, where a separate fee is charged.
As a business owner, it is important that you have a sound understanding of both insurance and uninsured exposures for your business, due to the inability to control all outcomes.
Policy Cover and Features
Professional Indemnity Insurance aims to provide protection for:
- Legal costs and other expenses associated with defending a claim.
- Settlements, compensation, and/or damages awarded against the insured; and/or
Policy features may include:
- Competition and Consumer Act or similar commonwealth legislation designed to protect consumers
- Libel and slander dishonesty
- Loss of documents
- Defense costs
- Official enquiries cover
Benefits of Professional Indemnity Insurance
- Peace of mind and valuable time savings with the knowledge that there are experienced legal professionals that will take care of any claims or allegations made against you.
- Reduction in the possibility of interruption to your business.
- Reduction in the probability of lost income as the legal costs incurred will not only be covered by a Professional Indemnity policy, but will be reduced because of the experienced professionals engaged to defend your claim.