Negligence! Breach of Trust! Liability! Lawsuit! Frightening nightmarish terms and highly avoidable too. Professionals in every field dread these terms and dread even more having to deal with them in the course of their careers. But with the consumer becoming the king, and the scales of justice being tipped in their favor nowadays, every professional is wary. The old adage of better being safe than sorry is being applied and Professional indemnity insurance policies are being taken out.
Oh no! Not another insurance product that promises to be better than the previous one, we might moan in irritation. But the fact of the matter is that more and more professionals are taking to professional indemnity insurance to protect themselves and their livelihood. Essentially the underlying thought behind professional indemnity insurance is to protect the professional from claims made against them by disgruntled clients. Not only is a lawsuit financially crippling but it is also damaging to the reputation of a professional. The professional indemnity insurance helps the clients ride out the strain of a lawsuit. In fact this type of insurance has become mandatory in some professions while in others it is strongly recommended by business advisors. Not only do they cover the costs of a lawsuit but in many cases they cover the costs of payouts, if any, to the plaintiffs.
Who are the professionals who need the protection of professional indemnity insurance? There are some professions that are considered high risk like doctors and lawyers. Then there are accountants and architects. In fact insurance specialists say that professionals in all fields can only stand to benefit from professional indemnity insurance. Although the premiums may be considered high especially in professions that carry large risks, yet the benefits of this kind of insurance far outweigh the costs. People in high risk professions may be involved in several such suits in the course of their careers and one such policy takes care of it all. In fact the benefits of having professional indemnity insurance can cover premium costs in a single lawsuit itself, vindicating the need for professional indemnity insurance.
There are several heads that are covered, negligence being the best known. Breach of duty, civil liability, and loss of data or records, intellectual property disputes…various professional indemnity insurance policies offer various permutations and combinations of all these heads to their clients. A client can sue his lawyer if papers pertaining to his case have been misplaced. In which case professional indemnity insurance kicks in and the insured lawyer is safe from damages. Some companies even offer group policies, insuring several members of a single profession. Thus a collective benefit happens with much lower premiums.
What is ironical is that many of the suits may not be genuine at all. Negligence is a very subjective claim largely dependant in individual perceptions. However the insurance companies give coverage irrespective of the authenticity of the claim. Professional, legal and monetary help is given to the insured even if he loses the case. In fact it is often a strange twist but clients sometimes prefer a professional who has professional indemnity insurance. They know that even if they are dissatisfied and want to sue, the costs will be borne by the insurance companies.
It is expensive bit essential. A late entrant into the field of insurance, there is no doubt to industry watchers that professional indemnity insurance is here to stay. A particular need has been identified and Insurance companies are quick to zero in on client requirements ensuring a win win situation for all. The professional has his safety net, a dissatisfied client has his say and the companies get paid their premiums.
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