There are many forms of security and protection that a modern business requires, from taking measures to reduce cyber threats to practical steps for safeguarding premises. There is also another area that must be considered: insurance.
Depending on the industry, a business may need several types of insurance, including professional indemnity. But before we discuss the benefits of this insurance, first we will look at what it is and how it works.
What Is Professional Indemnity Insurance?
As a business owner, you may be in despair at the thought of needing another form of insurance. However, professional indemnity insurance is different from others and has a set of specific purposes.
This insurance provides protection against breaches and errors. This includes negligence, dishonesty, loss of data, copyright and trademark infringement. In the event of a claim, professional indemnity insurance will pay out to cover legal costs and any compensation owed.
Professional indemnity insurance should be considered by all businesses that deal with consultancy, provide advice, or original designs. This includes software developers, financial advisors, lawyers and journalists.
Now that we have covered the basics, here are the 4 main benefits of professional indemnity insurance.
If your business did not have professional indemnity insurance and a claim were to be made, it could cost thousands in legal fees alone. Any time there is a claim or lawsuit on a business, it can spell financial trouble for the business. Lawyers are very expensive and going to court can cost thousands just to get started. Professional indemnity insurance can protect against this, reducing the financial ramifications of a successful claim.
Similarly, by protecting against financial risk, professional indemnity insurance can promote business health. While a company may experience a reduction in trust following a claim, this insurance could protect your business by reducing cash flow issues and allowing normal business activities to continue with minimal disruption.
If you or your staff are worried about the implications of any mistakes that may be made, it’s likely that work will not be as productive. This insurance allows employees to focus on the tasks at hand, while affording business owners the peace of mind needed to grow their venture. As you can imagine, it’s much easier to grow a business when you don’t have to worry about liabilities that come along with growth.
Professional indemnity insurance is not a case of one size fits all. Each provider carries out an assessment which covers risk and how much cover is required. This allows insurers like Arthur J. Gallagher to create bespoke packages based on individual business requirements.
Protecting a modern business can be difficult, with many areas that require covering or defense. By being informed about professional indemnity insurance, hopefully you feel better prepared and able to make decisions about your business. You will not have to worry about dissolving a company due to a mistake on your part or by other people in your business. Moreover, it can give your business the protection it needs to continue growing now and into the future.