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Anyone can make a mistake – but if your business is found liable for negligence, the costs can be financially devastating. Not only can it lead to an expensive lawsuit, but your business’ hard earned reputation may be damaged as a result.
That’s why professional indemnity insurance matters – help protect your assets and brand if your advice or services cause a client to take legal action against you.
Professional indemnity insurance is mandatory in some industries, such as medicine, accounting, law and financial advisors – with the requirement differing from state to state.
But even in cases where it’s not required by law, it’s recommended for anyone who is providing professional services or advice in exchange for a fee – like graphic designers, IT consultants and more. And regardless of your legal obligation, it’s often a customer requirement that you have this cover in place.
Michael is an engineer who designs the supporting foundations of a residential property. He makes an error with the site calculations – which leads to the slab cracking and a damage to the property of the owner. His company is liable for this loss, which could be anywhere between $150,000 up to the full value of the house.
But because Michael has professional indemnity insurance, he’s covered for this amount – as well as any legal expenses if the matter goes to court.
For more Information download our guide on Professional Indemnity Insurance