A Dummies Guide to Professional Indemnity Insurance
If you’re in the process of starting a new business, you’re probably finding that your head is full of ‘must do’s’ and ‘must not do’s’. Must inform the tax man, must not lose my receipts. Must create a website, must not use an existing company name. And so on and so forth.
One ‘must do’ that you may not have come across just yet is the ‘must get professional indemnity insurance.’
What Is It?
If you’ve never heard of it, professional indemnity insurance is an insurance which will cover you in case a client files a claim for compensation against you and your business. A professional indemnity insurance provider can tailor your policy to perfectly suit your needs.
Why Do I Need It?
If you’re thinking ‘that will never happen to me’ then you should think again. All businesses are battling against a difficult economy, and any negative effects that a company or client may suffer because of your actions or advice are unlikely to be ignored.
A company is well within its rights to seek compensation for your mistakes, as you would also be likely to should the situation be reversed.
But I Won’t Make a Mistake
No matter how competent and confident you are in your area, the fact is that mistakes can still happen. If advice which you feel sure to be right at the time, turns out to be wrong for a particular client, then they’re likely to place to blame with you.
Of course, your business could even fall foul of a bogus claim from a company wishing to ‘pass the buck’ for their misdemeanours. In this case, defending your business can cost thousands in legal fees.
What’s the Worst That Can Happen?
A claim for compensation can be financially devastating for a SME (small to medium business enterprise) or an individual. Think of the time and effort that you have spent securing finance and setting up your new business. To not protect your enterprise with professional indemnity insurance is likely to be one of the worst business decisions that you can make at this early stage. So, don’t be a dummy – make sure that you’re covered.