Professional Indemnity (Liability) Insurance

Sunshine Coast Insurance Brokers

We all make mistakes and some mistakes can be costly.  Like the building designer who was sued for $1 million worth of design defects in a commercial development.  Luckily, the company had professional indemnity insurance and was able to claim the full amount on their policy.  Without this insurance, the designers would have incurred a massive financial loss, which might even have caused their business to collapse.

If you’re a business owner, professional indemnity insurance can similarly help protect you against the financial consequences of any mistakes you or your staff might make.  It also protects against accusations that you’ve done something wrong, even if you haven’t.

Who is a Professional?

Think of a professional and you’re likely to conjure up an image of the typical office worker:  an accountant, lawyer or architect.  But as far as professional indemnity insurance is concerned, a professional is anyone who is relied upon for their expertise.

That could be a surveyor, engineer or IT consultant.  A naturopath, real estate agent, personal trainer, or management consultant could also be considered to provide professional services, as could a yoga instructor or a reiki healer.

How does Professional Indemnity Insurance work?

Professional Indemnity protects business owners against:-

• Allegations of negligence, and
• Claims of malpractice and professional misconduct.

Professional indemnity insurance protects policyholders against two types of financial loss:

• The legal costs of investigating and defending a claim made against you and/or your business, and
• Any amounts payable in relation to the claim.

Examples where Professional Indemnity Insurance could apply include:-

• An accountant who incorrectly advises a client that an expense is tax deductible
• A chiropractor who manipulates a client’s back and causes injury
• A beautician who applies a facial treatment to a client which damages the client’s skin
• A solicitor who provides incorrect legal advice
• A financial adviser who recommends investments which don’t match a client’s risk profile

Purchasing Professional Indemnity Insurance

Professional indemnity insurance is a specialist area and should be arranged through an insurance broker with expertise in this field.

You and your broker should discuss:-

• The level of insurance cover you require.  Some professions have governing bodies that set strict guidelines specifying the level of professional indemnity cover required to trade, and some contracts for services specify a minimum level of professional indemnity cover.  In these situations, be sure to comply with the specified level of cover.
• The relevant excess (the amount you need to pay when you make a claim before the insurance kicks in).
• The entities and people that should be insured under the policy.

Comsure Insurance Brokers can help mitigate your risks and minimise what can be a significant financial impact on your business should the unexpected happen. Professional indemnity insurance forms part of a comprehensive insurance program that we can help you to develop for your business.  If you would like to know more or discuss this further, please get in contact.

Business that provide professional advice

Heath Care providers	Design Engineers
Lawyers	Management Consultants
Auditors and Accountants	Building Inspectors
Architects	Social Workers
Software Designers	Construction Contractors
Financial Advisors	Real Estate Agents
Independent Contractors	Information Technology Companies
Health & Safety Trainers	Independent Consultants

Difference between Professional Indemnity and Public Liability Insurance

Professional Indemnity insurance covers your legal liability arising out of the professional advice you provide to your customers. If you are not providing professional advice you do not require Professional Indemnity.
For example, a client slipping and falling in a doctors’ surgery would be a public liability claim.  But if they are injured because the doctor failed to diagnose their illness correctly, then that would be a professional indemnity claim.

As your insurance broker, we can help to mitigate your risks and minimise what can be a significant financial impact on your business should the unexpected happen.