Professional indemnity insurance is pretty much the most important insurance you can have. If you are a sole trader, self-employed, own business owner or just starting, maybe you don't think professional indemnity insurance is for you? However, it would help if you considered whether or not it could benefit your business.
Who Needs Professional Indemnity Insurance?
In the past, some people have seen professional indemnity insurance as something that is simply nice to have rather than a necessity – but in the current climate, it has become increasingly important to protect yourself, your employees and your clients.
Professional Indemnity insurance can cover any costs associated with defending against a claim of negligence or breach of duty by the client. In addition to covering any damages awarded by the court, PI insurance will pay legal costs as well as the cost of defending against any claim.
Some examples of businesses that need PI insurance include:
- An accountant who makes an error in their client's tax returns resulting in additional tax liabilities or interest owing to the Australian Taxation Office (ATO)
- A human resources manager who accidentally sends confidential salary details to staff members outside their department
- A marketing consultant who designs a logo for a client which infringes another company's trademark
- A solicitor whose client loses money because they provided poor legal advice
Why You Need Professional Indemnity Insurance
To comply with regulations - Failure to comply with these regulations can result in severe penalties if you are in an industry that imposes a professional indemnity insurance obligation.
To attract clients - If you are working as a contractor for another company, it is essential to have Professional Indemnity Insurance in place to know you are covered against negligence claims.
Protect your business from financial loss - Primarily if your business relies on providing advice or services to other companies or individuals.
To protect your reputation - It's vital to maintain a good reputation in business, and demonstrating that you have PI Insurance in place if anything goes wrong can be highly beneficial.
Business Insurance Group Pty Ltd offers Professional Indemnity Insurance for any professional, including lawyers, accounting firms, IT consultants, and others. Their experienced team of insurance brokers in Loganholme can provide you with a free quote and consultation to discuss how we can best look after your business regarding risk management and help reduce your overall financial obligations.
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