Professional indemnity insurance – what you need to know

October 30, 2009 · Filed Under Professional indemnity insurance · Comments Off 

Physical risks such as flooding and fire are one thing, and apply to domestic homes as much as businesses. But companies have other issues to consider such as the potential risk of legal action, depending on the nature of their business. Professional indemnity insurance is a form of cover which may pay out for legal costs and as such may be a potential lifesaver in certain circumstances.

Typically this kind of cover pays out for solicitors’ fees and compensation costs if you are taken to court as a business or sole trader. This may happen because the client thinks you have done a poor job, and the cover may apply to pretty much anybody who offers professional advice.

In the past it was mainly associated with the likes of architects, solicitors, and doctors. In some circumstances a trader may need professional indemnity insurance, or PII as it is known, in order to gain membership of professional bodies or to comply with legal requirements.

These days with the emergence of a more legally aware society, professional indemnity cover may be useful for a wider number of firms such as IT contractors, builders, designers, management consultants, and a whole range of other experts.

Provided somebody stays within the policy limit, payouts may be made towards legal costs and compensation right the way through the court system, from initial hearings all the way up to the High Court if the case gets that far. Furthermore, payouts are not dependent on whether or not the claim against you is valid or not. Even if it is found that the claimant’s allegation is correct, you would still get a payout.

Professional indemnity insurance comes in various different levels, and the top payout level on a policy is important. Choose something too low, and you may end up under-insured, forced to pick up the difference if your case overruns in terms of legal and compensation costs.

Choosing something to high may mean that you end up over-insured, paying for a level of protection that you don’t really need.

You may choose to carefully review your turnover, client list, and other factors before deciding on what level of cover to choose as it is important not just in terms of the premium costs.

Professional indemnity insurance limits may be quite flexible depending on the provider, allowing you to specify a level which stays within your budget but which provides adequate protection in the event you do face that unwanted court case.

Arranging effective management consultants professional indemnity insurance

October 22, 2009 · Filed Under Management Consultant Professional Indemnity Insurance · Comments Off 

All professional consultants are expected to deliver a high standard of service. In many cases there may be extra pressure on management consultants to do a good job as they may offer a high level advice which some companies may be relying on to deliver significant results. As such you may face serious financial and practical challenges if you are ever sued because a client is unhappy. Management consultants professional indemnity insurance may help to protect against the financial impact, so taking away some of the stress associated with court action.

Indemnity cover can be used not just by management consultants, but by a wide range of professionals, such as accountants, doctors, architects, and graphic designers.

It may pay your legal costs and even any compensation awarded against you if you lose a court case. Payouts apply to simple and straightforward hearings right the way through to an appearance at the high court if necessary and if you are still within the policy limit.

Being sued often means hiring legal help and this may be very expensive. On top of this, if the court rules in favour of the claimant, you may be ordered to pay them compensation and even pay their legal bills. This is the type of circumstance in which a case may end up costing someone millions of pounds in some circumstances.

A policy like this pays out in the event you are accused of making a costly mistake, error, or committing an act of negligence. Although obviously not every error results in court action, if you did cost a client a considerable amount of money by delivering erroneous advice, they may seek to recover any money they feel they have lost.

On top of this management consultants professional indemnity insurance also typically pays out against claims like unintentional defamation, breach of confidence or copyright or a claim that you or an employee of yours has acted dishonestly.

It typically even applies should you lose an important client’s data or documents, for example if you accidentally lost, destroyed, or wiped a hard drive.

All policies come with set limits, essentially a ceiling above which the insurance company may not pay for any more legal fees or compensation. This is important because typically it relates to the premium. The higher the payout limit, the higher the premium may be.

Also, of course if you go above this premium limit, you cannot expect to get any more cash towards legal defences so getting it right may be crucial. You may want to look carefully at your turnover, client list, and the type of work you do. Professional help may be useful in helping to decide on your level of management consultants professional indemnity insurance.

Management consultants insurance and how it protects against legal action

October 17, 2009 · Filed Under management consultants insurance · Comments Off 

To properly insure a business you may need to look carefully at its risks and assets. You may want to carefully think about the kind of clients you deal with and turnover. Managerial experts, as professional advisers, are as at risk as many other companies, and may want to consider management consultants insurance as a straightforward way of protecting their business.

A business insurance policy may typically include professional indemnity insurance. This is often referred to in the sector as PII. Some people who have never dealt with the sector may never have heard of this phrase before, but to some people it is a staple part of their business defence system.

It is designed to protect against legal threats, which may happen if a client is unhappy and feels you have done a bad job. Worse still mistakes may happen and may lead to clients losing money, to which end they may take legal action, i.e. sue, in order to get compensation.

Management consultants insurance with an indemnity element may pay your legal costs and even compensation fees if you face such an action.

In exchange for a premium the insurance company may cover not just the costs of hiring a defence team, but also the costs of anything which the court awards to the claimant if they are successful. Furthermore, the claim against you need not be invalid for you to get cover, typically a policy pays out whether or not what the other side is saying is true.

A policy often protects against mistakes, acts of negligence, and allegations that you have defamed someone. It even protects against claims you have breached confidence or copyright, or that you or one of your employees has defrauded a client, acting dishonestly in their business.

Protection like this may be crucial in some circumstances because a court case may cost hundreds of thousands of pounds to defend. Unless someone fancies representing themselves, they typically have to hire legal protection which may easily run up massive bills. Then on top of this if the case is lost you may have to pay compensation and even cover the costs of the other side’s defence.

This is why management consultants insurance may prove a lifeline in the face of an unpleasant legal action, which, while by no means certain, is a common eventuality in many business sectors, including consultancy.

What may come with an IT consultants insurance plan

October 12, 2009 · Filed Under IT Consultants Insurance · Comments Off 

Whether your game is software design, network development, or Internet Marketing, you may find that IT consultants insurance provides a valuable safety net. This is because it protects against some of the legal threats which are associated with common business practices.

For being sued is now a very real risk, not just for doctors and other professionals, but for anybody who offers their advice on a professional basis.

Clients may take legal action if they feel that you have done a poor job or have cost them money. They may seek compensation through the courts and lodge cases which can drag on for many months and which typically need legal help to defend.

IT consultants insurance with a professional indemnity element may help to pay your legal costs up to a set ceiling.

To give an example, you may draw up a plan to upgrade the company network of a client. But then later if the client believes it contained erroneous advice, IE mistakes, they may seek legal action to recover any money which they spent putting it right.

One of the major benefits of IT consultants insurance is that it does not matter whether or not the claim against you is true or not, typically a policy may pay out regardless. However, the alleged mistake must take place within the guidelines of policy. Most may payout in the event you are accused of a mistake, error, or negligent act, or general slip up in the conduct of your business.

Beyond this a policy also typically pays out if you or an employee of yours is accused of dishonesty, and is perhaps said to have stolen from a client. Beyond this it may also payout in the event you are accused of unintentional defamation, breach of copyright or confidence, or even slander.

This kind of insurance in most cases pays out regardless of what stage your case reaches. Provided you are within the payout limit, you get cash for representation whether you are in initial proceedings or have ended up at the High Court.

If damages are awarded against you, i.e. compensation, a policy may pay out towards this as well, which again may be covered in full if you are still within the policy limit.

In such circumstances you may save hundreds of thousands of pounds or more which you may otherwise have to dig out of the company coffers, or face bankruptcy in some circumstances.

The policy limit is important because it is often linked to the premium. Too much cover and you may end up over insured, paying for a level of protection which you don’t really need. Too little, and you may also end up under insured, picking up any additional cost past the policy limit if you face a lengthy case.

This is why it is important to consider the maximum payout on a policy. You may want to judge it by taking professional advice and looking carefully at the clients you deal with and your turnover before settling on an IT consultants insurance plan.

Choosing an IT contractors insurance plan

October 2, 2009 · Filed Under IT contractors insurance · Comments Off 

Working out the administrative side of things can be tricky for many businesses, and IT contractors may typically rather get down to their contractual work than spend hours sorting out business insurance plans. However, IT contractors insurance may allow a professional to work with added security.

This kind of cover may feature professional indemnity insurance, often known as PII. It may be useful for a number of different consultants and not just IT professionals. It may pay your legal costs including compensation in the event you are taken to court – referred to as being sued, by an unhappy client.

Typically this can refer to mistakes made in the conduct of your general business. For example if a drive is wiped by accident, costing a client a considerable amount of cash – in which circumstance they may decide to take court action in an effort to repair their ‘financial injury’.

Some businesses need PII in order to achieve membership of industry bodies or in order to fulfil legal requirements. This may not be the case for IT contractors, but a policy may be more than sensible.

Unless the business has considerable cash reserves put away, they may find burden of a court case and its associated solicitors and compensation costs too much to bear.

IT contractors insurance with indemnity cover may pay your legal costs up to a set ceiling which is laid down or the policy agreement. This amount is often decided with your input so the excess means you need to make a decision as to how much cover you really need. A firm may do this by judging their client base and the size of their regular contracts.

Payouts are not based on whether or not the claim made against the company is valid – you may get a pay out regardless of whether or not the accusation levelled against you is valid or not. Generally insurance like this may cover accusations you have defamed somebody, made a costly error in your work, acted negligently, or breached confidence or copyright accidentally.

IT contractors insurance often also protects against claims that you or your employees have acted dishonestly and perhaps stolen from a client, for example.