As a business owner or qualified professional, you provide your expertise to clients. They buy your services, and expect you to deliver what they’ve paid for, inline with the agreed quality, cost and time. They also expect that any advice you provide will be accurate, complete, and appropriate for their circumstances. All this adds value to their business.
However, even with the highest care and diligence, mistakes can happen, and your clients can hold you accountable for errors or omissions that impact their business. This is where professional indemnity insurance becomes crucial for your protection.
In this blog post, we will explore why professional indemnity insurance is important for your business, and why it should be an essential part of your risk management strategy.
1. Professional Liability Insurance provides financial protections
Claims from professional misconduct are on the rise and when they happen, penalties can be significant. Professional Indemnity (PI) insurance gives you and your business, financial protection against these types of claims.
In particular PI covers things like:
1. Legal costs incurred in the defence and investigation of the claim.
2. Compensation required to be paid in order to dispose of the claim.
So in the unfortunate event of a client’s claim against you, the right level of PI will give you the financial support to keep going with your business and life. Without it, you could be personally liable for these costs, which may lead to substantial financial strain for you and your business.
2. The right level of PI shows your professionalism and provides a competitive advantage
In today’s highly competitive market, clients are becoming increasingly discerning about the businesses they choose to work with. In many instances, clients will require you to have an adequate level of PI, before starting a business relationship. This is where the right level of professional indemnity insurance will set you apart from your competitors.
It will instill confidence in your clients (current and potential), reassuring them that you take your risks and responsibilities seriously and are prepared to handle any unforeseen circumstances. This competitive advantage will help you attract and retain clients, build long-term relationships, and ultimately, contribute to the success of your business.
In many industries, professional indemnity insurance is a legal or regulatory requirement. For example, if you are a doctor, lawyer, accountant, architect, engineer, or consultant, you have mandatory insurance obligations. Failing to comply with these requirements can result in penalties or a licence being revoked. Therefore ensure that you have the appropriate level of professional indemnity insurance to demonstrate your commitment to professionalism and adherence to industry standards.
3. Professional indemnity insurance is important for your peace of mind
Running a business and providing professional services is a challenging endeavor. In your day to day operation you need to be focused on the best outcomes for clients, without thinking about the consequences that may occur from potential professional misconduct.
The right level of PI will help you achieve just that. It will protect your business from unforeseen claims and ensure your assets and your reputation are protected/. This will provide you peace of mind so you go about your day confident in giving others valuable advice and services.
If you need professional and customised PI insurance advice and want to get a quote, give us a call on 1800 958 384 or email us at hello@omnisure.com.au. Our PI expert Retha Van der Merwe, has 37 years experience and has worked with start-ups as well as large listed companies, and is passionate about creating tailor made insurance solutions for our clients.
