What is professional indemnity insurance?
Even when you and your business follow all the correct codes and regulations, mistakes can happen and you can be found liable for these errors.
When a mistake of professional nature occurs and results in a financial loss for the external party involved, they may seek damages. Under the Trade Practices Act (1974), you or your business may be found responsible for this loss, even if the error was not negligent or intentional.
It is therefore important to protect your business with a comprehensive professional indemnity insurance policy.
Indemnity insurance compensates policyholders if they are found liable for any financial loss caused by negligent acts, errors or omissions during the conduct of their business or profession.
If the affected third party decides to follow up a professional mistake with legal action, a professional indemnity insurance policy will cover the costs incurred through the investigation, defence or settlement of these claims.
Additionally, if the affected third party is awarded damages or compensation, a professional indemnity policy will cover this expense.
Professionals who do not hold this policy would have to pay these costs out of pocket, which can significantly damage a business’s financial standing.
If you provide advice or a service to another person in the course of your work, you are considered a professional and thus could fall victim to such action.
In a number of cases, professional indemnity insurance is a requirement for registration and practice in particular fields, such as nursing, midwifery and consultancy.
As a wide range of occupations and industries are covered under the term ‘professional’, choosing the right indemnity policy can be a complex decision.
Fortunately, Bruce Insurance offers tailored professional indemnity insurance Perth and Australia-wide to ensure local companies and businesses receive suitable cover they can rely on.