Among all insurances that businesses are carrying, professional indemnity is the one you will actually need to grow your business. Contrary to fire insurance or public liability, which are needed in event of major risks, when you buy professional indemnity insurance, it provides a company more than just risk coverage, it can help your business to thrive and compete against larger corporations. See below the key reasons why you need to buy professional indemnity insurance
- It is a requirement to sign a contract or perform an activity
Your client will most likely ask you to buy professional indemnity to protect themselves against financial risks of errors and omissions when performing work: without this policy, most companies won’t have the financial capability to face claims in event of an error or omission.
- To perform an activity
If you are in a regulated industry, like doctor, lawyer, architects or even financial advisor, professional indemnity insurance is a must and all companies will need to buy it to perform their work. And this is a good thing, as industries which are required to buy professional indemnity are high risk professions, and without such requirement, covering such risks will cost much more: by creating an obligation to carry such insurance, regulator creates a much large pool of insured, allowing insurers to reduce the risks and rate for all.
- To grow your business
Professional indemnity insurance can actually help companies grow their business. Indeed, having professional indemnity insurance can put forward to show your clients that you are covering them as well in event of claim: it could be used as an additional sales argument to pitch for new prospects.
- To give you piece of mind
Your terms and conditions disclosed in your contract are not enough to protect your company in event of errors and omissions of your team. It will only give guidelines on what is expected or not and what you need to do, but will be irrelevant in event of gross negligence. Only professional indemnity insurance can cover such risk. Thinking of the worst scenario will help you to prepare and get the right coverage, and piece of mind!
- To cover your long term liabilities
For any business owner, being your own boss gives you a lot of freedom. You may decide to sell your business and look for a change whenever timing is right. However, you are not immune against long term liabilities once your business is sold. Nature of professional indemnity claims make it possible for a claim to rise one or two years after the job has been performed, and liability related to that will still fall under you. Negotiating a long term shield to extend professional indemnity when selling your business is a way to remain trouble free!