It is becoming crucial to have Business Insurance, regardless of the size or industry of your business. Having Business Insurance mitigates the potential risks that may constantly threaten your business. There are many types of corporate insurance available and it is important to know the types of corporate insurance that your company needs.
For an instance, investment firms are one such company that is involved in conducting risky activities due to the inherent nature of their business. To minimize such risks we have previously discussed the importance of financial institution insurances, now let's dive deeper into one of the most important types of business insurance that most companies require to protect their liability.
In this blog, we will talk about professional indemnity insurance which is designed to insure you against the risk of providing services. It serves as a risk management plan to protect your company. Besides, it also provides peace of mind for your clients. Reading further you will get the answers to all your questions around professional indemnity coverage, its cost, and why it is relevant to your business. Moreover, you may always contact BLACAZ. for tailored assistance when it comes to this type of insurance.
What is a Professional Indemnity Insurance?
This type of insurance is an essential component of risk management for businesses providing professional services. It protects professionals from carrying the cost of defending against a negligence claim made by a client. It also covers compensation owed to the client to correct such negligence. In short, this insurance protects you or a member of your team from potential mistakes and reduces your legal liabilities.
Professional Indemnity Insurance helps to mitigate unwanted breaches of professional duty. It also acts as a protection against various types of losses such as loss of documents, data, goods, or money.
Let's imagine that you have an employee working for your investment firm. This employee mistakenly sent a client’s information to the wrong person. The client decides to take legal action against your company for breach of confidentiality. In this case, professional indemnity insurance will come into play and cover costs and expenses incurred. It will also cover legal costs and expenses that may sometimes be extremely high. Thus, what is also referred to as professional liability insurance is a safeguard to a negligent act error or omission.
What does Professional Indemnity Insurance protect you from?
Professional liability insurance helps to cover the indemnity for any sum, direct consequences of any negligent act and pays for the expenses incurred in the defense. You will have to pay for exorbitant legal defense charges out of pocket if you are sued by your client and do not have Professional Liability Insurance coverage.
Is Professional Liability needed?
It is advised by the Monetary Authority of Singapore that all investment firms must have an appropriate professional indemnity cover.
Professional Indemnity Insurance is often advised for advice or services businesses. This can apply to companies dealing with financial services, financial advisors, real estate, business consultants, architects, healthcare professionals amongst many others. Furthermore, other types of companies may still benefit from such coverage. A media company needs coverage for unintended breach of confidentiality or inadvertent infringement of intellectual property rights.
Managers working on clients’ projects need protection against incorrect advice or breach of contract. In short, various businesses should take advantage of this type of insurance. It helps your business look more professional as well as provides peace of mind for your team and clients.
How does Professional Liability Insurance work?
Most insurance companies have their professional liability policy based on claims with a retroactive date and extended reporting period.
Difference between Professional Liability and Public Liability
Public liability and Professional Indemnity insurance both offer financial protection against lawsuits.
Third-party lawsuits stemming from injuries or property damage caused by your business operations are covered by public liability insurance. Professional Indemnity, on the other hand, is a type of insurance that safeguards businesses against lawsuits filed by clients as a result of services rendered.
Professional Indemnity Insurance
- Covers defamation
- Covers for professional errors & omissions
- Does not cover physical injury or property damage to third-parties
- Covers physical injury or property damage to third-parties
- Does not cover defamation
- Does not cover for professional errors & omissions
How does Professional Indemnity Insurance protect different professionals?
Professional Indemnity Insurance is necessary for most organizations. Business owners opt to get coverage in the event that a client files a lawsuit against them. You will need Professional Indemnity insurance if you provide professional services to consumers or give your clients advice on a regular basis.
Accountants and auditors
Engineers' professional indemnity insurance protects them financially from litigation arising from issues like cost overruns and difficulties with construction supplies. For some projects, you are required to show proof of professional indemnity insurance to the clients. Budgeting issues and the missed deadlines are usually the main concern for engineers. The client has the right to sue your company for negligence when the deadline of the project is not met. Having Professional Indemnity Insurance covers and protects your business. There's always the possibility of mistakes and disgruntled customers, no matter what service you provide. Paying for Professional Indemnity Insurance would cost lesser than the price to pay for lawsuits.
How much does Professional Indemnity Insurance Cost?
The cost of Professional Indemnity Insurance can start as low as SGD 74 per month. However, the price varies depending on several factors. Such factors include the type of your business and level of risks, your business' claims history, the daily operations, the number of employees, and the degree of coverage you desire. It is difficult to determine the cost of this insurance. Thus, we advise you to contact us to get an assessment of the insurance needed for your particular business.
When you want to get a quote for your business, having important business documents on hand is necessary. Some of the important business documents are the copies of contracts, any information about the previous errors and omissions coverage, the quality control processes, and the documentation procedures.
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About BLACAZ. Insurance
Since 2014, BLACAZ. has helped its members navigate the complex insurance industry, enabling them to make the right choices. Based in Singapore, the company offers professional services and solutions for corporations and individuals internationally in their insurance portfolio audit, structuring, and management. It is committed to securing the most competitive and viable insurance options for our members. We partner with them to find suitable solutions for their current needs and future plans.
Professional indemnity insurance is no exception to the rule. BLACAZ. has been dealing with this type of insurance for many years and can guide your research effectively. You can get your customized quotes online in a minute.
Contact us today so we can answer all your questions regarding professional indemnity insurance and guide you through the insuring process. While mistakes happen, adequate coverage will offset the potential financial loss and ensure the long-term success of your enterprise.