Professionals are required to follow the guidelines set forth by professional bodies. If they do not adhere to the code of conduct for their profession, they could be held responsible. In such cases, they will require support to help them deal with any subsequent litigations and loss.
Professional indemnity insurance, (PII).
Any professional can be a journalist, a software designer, chartered accountant or architect. Every professional who performs a profession in the service of another party is at risk.
They should therefore consider taking appropriate insurance to protect themselves against the potential losses resulting from legal risks. Profession indemnity insurance is one such policy that professionals can use to protect themselves from these unexpected risks. To ensure smooth running of their business, every professional should have professional indemnity coverage.
Items covered by this policy
This insurance is beneficial for professionals as it covers the following.
• Loss of important files or data: An important aspect of business is data. Data confidentiality is crucial when a company transacts on business with a client. The parties may sign a non disclosure agreement with only a few employees. Sometimes the file or data might accidentally be passed to third parties due to a transaction between the company, third party, and the company. Sometimes technical problems can cause the file or data to be lost. PII covers financial losses resulting from these actions.
• Accidental negligence: In course of business transactions between a company and its client, negligence can occur either because of overlooking the data or as a matter inadvertently presenting erroneous data because of some sudden impulse. An example: A worker who is processing data for a client deletes the client’s files because of an unexpected event. The situation you describe is different from the one that results from negligence. PII provides coverage for such unintentional errors.
• Dishonesty by employees: When a company employs an individual, the assumption is that the individual would be scrupulously honest while working for the company. It might not always be true. The company could be held responsible for breaching a contract if it is exposed to unforeseeable circumstances like the loss of data, documents, or monetary assets. These losses are covered by PII.
• Intellectual property infringement: If there is any ‘unintentional’ infraction of copyright, trademarks, broadcasting or telecasting rights, PII would help. If the infractions are deliberate, PII will not help.
Benefits of this policy
Professionals should consider purchasing PII to protect their business and be sure of smooth operations. There are many benefits to this type of insurance.
• PII protects a professional from any legal liability arising as a result of executing a transaction. It also covers the costs of litigation.
• Next, this policy covers the expenses involved in finding a way to rule out such legal liabilities in future. This would allow the parties to resolve the issue without having to go to court.
• Some companies put PII as a conditionality to allow a party to work with them. This is done to protect the company’s interests. This insurance is beneficial for you.
• This insurance also protects you against liabilities as a result of accidental happening which may result in wrong doing.
• If you face a legal liability, and you think that you have been maliciously targeted for a fault of none of yours, this insurance is useful. These lawsuits can be costly and take a long time. Insurance policies cover the costs of this litigation. This insurance policy is particularly useful for small and medium-sized businesses, as they don’t have the resources or the expertise to pay for the litigation.
Professionals can face liability for many reasons. You may have one or both of these reasons. It doesn’t matter if you are an expert at your chosen profession, it is still possible to buy it. You never know, it might be you.
