Also known as professional indemnity insurance (PI insurance), this type of liability coverage offers a financial safety net for professionals who provide advice or services to customers. PI Insurance is ideal not only for brokers and accountants, but IT consultants, real estate agents, engineers, journalists, designers, and marketers.
Given the vagaries of the business, it is not uncommon for those in the field of consultation to be the target of negligence claims by a third party. This can result in both financial damages as well as irreparable harm to your reputation as a professional. Legally, most professionals are compelled to provide a reasonable amount of skill and care when providing guidance to a client.
PI cover will typically cover you for any errors made while consulting with a client. Furthermore, if a claim is deemed spurious, the insurance company will assist you in defence of your business all the way to the High Court. Even in the event you lose such a case, in most cases all legal costs and compensation to the aggrieved will be covered by the insurance policy. The cost of any corrective measures may also be included in the policy.
In addition to mistakes, professionals are also liable for any omissions they make when providing advice to customers. For example, a financial adviser may push an investment based on factual evidence, but at the same time neglect to give a full portrayal of the risks involved. In this instance, he or she may be liable for not properly conveying the risk, despite the accuracy of their statement.
Most professional liability coverage will protect individuals from the following infractions:
- Contract breaches
- Negligence by you or your employees
- Information leaks
- Fraudulent or criminal acts committed by an employee
- Confidentiality breaches
- Copyright Infringement
- Libel or slander
- Data loss