Professional Indemnity Insurance – What should be Covered?
Don’t buy any Insurance until you do Some Research
Whether you are a professional, such as a lawyer or accountant, or work as a subcontractor in the construction field, you can’t overlook the importance of professional indemnity insurance (also referred to as errors and omissions insurance). You’ve worked hard to establish yourself in your profession, so errors and omissions insurance (or E&O insurance) is necessary coverage. Therefore, when you are considering purchasing a policy, you’ll need to make sure the plan adequately meets with your requirements. Before you make a decision to buy a policy then, review the claim history of your specific profession. That way you can better determine what coverage is best for your particular occupation.
Basic Considerations
First and foremost, professional indemnity insurance should provide protection for any legal costs you incur from contesting a claim. Therefore, the insurance should cover the expense of litigation, whether or not you are found to be liable legally. In addition, if you employ a staff of professionals as well as subcontractors, the protection should extend to them as well. However, subcontractors should still purchase their own errors and omissions insurance to protect them in case they are sued for their actions apart from your company.
Additional Insurance Protection
You may also want to look at additional coverage in the form of personal injury insurance. Personal injury insurance is designed to cover you should you be sued for damages related to slander or libel. Extra coverage is also available for any claims arising out of intellectual property or copyright infringement. This type of insurance coverage is suggested for IT consultants or professionals as it can cover them if they work with software products or on computer systems and are charged with the offense.
You Can’t Avoid this Expense
Nowadays, you may think that professional indemnity premiums are rather high. However, the cost of forfeiting professional indemnity insurance coverage, should you be sued, is much greater. Professional indemnity insurance is just something you must buy if you work in a profession or run your own business or company.
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