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Indemnity
insurance is usually required if the profession you are working in has
a high risk of a claim to be made against you or your company.
Obviously if you are in a low risk profession then you will usually not have to look into taking out indemnity insurance.
If you have a high risk of being sued then it is prudent to take out
insurance that offers you a level of protection against being sued by
either your customers or clients.
The reason for this is that you can lower the risk of suffering
financial difficulty at the risk of being sued for the serivces that
you provide your clients.
When you are offering professional services to your clients then it is
important to look at taking out indemnity insurance. That is because
you will be at the risk of being sued for the services that you provide
your customers. This type of insurance usually covers you for the risk
that your services put your potential customers and clients under.
For example, if you are offering financial services to your clients and
you recommend they put their savings into a particular stock and it
falls dramatically then you are at the risk of being sued by them. Of
course this will depend on the agreement that you have them sign before
taking such action.
Although taking out this type of insurance is not compulsory for all
occupations, there are a number of occupations where it is compulsory.
Depending on the country and stae you operate within, such occupations
where compulsory professional indemnity insurance is needed includes
laywers, accountants and engineers. There are other professions that
require indemnity insurance however these are some of the usual
professions.
If you operate your business without such cover then you run the risk
of being sued by your customers and clients. If you feel you are at
such risk then it is important to cover yourself with such protection.
If you are sued without such protection, this can lead to severe
financial pressure and the possibility of becoming bankrupt.
Of course, even if you do take out indemnity insurance you will only be
protected by what is included within their terms and conditions. The
terms and conditions usually lay out what you are included for when a
claim is made. The policy document also usually outlines what you are
excluded from when a claim is made against you.
Obviously if you are providing services that are not covered in the
policy documents then you will run the risk of being sued for a claim
against these services. That is why it is critical you are aware of
what is included and excluded in the documents that you take out.
If you are sued for a claim against these services and they are not
included in your insurance policy document then you will still run the
risk of severe financial pressure or becoming bankrupt. That is why it
is important that you are fully aware of both the inclusions and
exclusions within your insurance document.
If you are pressed for time when selecting a particular indemnity
insurance policy then it could be a better idea to engage the services
of an insurance broker. An insurance broker will usually engage the
services of an insurance company on your behalf. They are usually up to
speed with the inclusions and exclusions of the policy documents.
The reason for this is that the insurance brokers are usually fully
aware of what is both included and excluded from each of the policy
documents released by the insurance companies. That is because they are
involved with a number of insurance companies every day and know what
is included and what is excluded from each of the documents. Of course
you can do this research yourself however it will take quite a bit of
time to fully research each and every document..
When you are recommended a particular policy document by an insurance
broker then it is usually the best idea to personally review the
document before signing the particulars and paying the premium. The
reason for this is that brokers usually do not accept any
responsibility for the advice they give their clients and the risk is
usually upon the policy holder if a claim is made against you.
When you sign an insurance document, the full risk is on you. If a
claim is made against you then you will not be protected if the claim
is not offered in your insurance document. That is why it is critical
you fully review any documentation before signing and paying the
premium to the insurance company.
However, just having indemnity insurance will give you a certain peace
of mind if you are operating in a litigious working environment. Of
course there is still the risk of being sued, however having adequate
indemnity insurance will mitigate your level of risk.
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