As one of your most valuable assets, it makes sense to protect your business with insurance. Unfortunately, 1 out of 10 Australian businesses with insurance don’t have enough cover to protect themselves against business disruption, legal liabilities, or loss or damage to their assets1. For businesses that provide professional advice or services for a fee, Professional Indemnity (PI) Insurance is essential, helping you manage the risk associated with claims against you for alleged errors or negligence committed under your capacity as a professional service provider.
Why is PI Insurance important?
Your clients rely on you to deliver quality service and advice, but mistakes happen, and when they do, if your business is found liable for negligence, the costs can be financially devastating. Not only could you face an expensive lawsuit, but your business’ hard-earned reputation may be damaged too. That’s why Professional Indemnity Insurance matters – because it helps protect your assets and brand if advice you give causes a client to take legal action against you.
What does PI Insurance cover?
The primary purpose of Professional Indemnity Insurance is to provide cover for liability arising from a breach of professional duty. Depending on your policy, Professional Indemnity Insurance can cover:
- Civil liability - Civil liability to a third party arising out of the conduct of their professional business.
- Inquiry costs - The cost of defending an inquiry by a regulatory body into the professional conduct of the insured.
- Defence costs - The costs involved in defending a claim triggered by the policy.
- Fidelity cover - Direct financial loss of the business caused by the dishonest or fraudulent conduct of an employee which is first discovered during the period of insurance.
- Advancement of costs and expenses - Additional costs and expenses incurred during a claim.
How does it work?
Here’s a recent case study that highlights the importance of PI Insurance:
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 damage to the owner’s property. His company is liable for this loss, which could be anywhere between $150,000 up to the full value of the house.
Because Michael has Professional Indemnity Insurance, he’s covered for this amount – as well as any legal expenses should the matter go to court.
How can we help you?
Arranging insurance cover often falls to the bottom of your never-ending to-do list, seen as something that’s too hard to deal with or too confusing. That’s where we can help. At Mortgage Express, our insurance brokers do the hard work for you, by reviewing your insurance strategy, adapting your cover, and providing you with peace of mind knowing that your business is properly insured.
Don’t be left carrying the financial cost of being underinsured. Contact Mortgage Express today to connect with a General Insurance Specialist in your area and get Professional Indemnity Insurance Cover that protects your business against claims made against you because of advice or services you’ve provided.
1Insurance Council of Australia, Non-insurance in the small to medium sized enterprise sector, July 2015.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.