Computer Contractor Professional Indemnity Cover discussed
Although some may be confused over what it is or even think it is an unnecessary expense, professional indemnity insurance, also known as PII, can be a vital safety net for a business. Besides keeping clients generally satisfied while balancing the books and managing employees, a computer contractor business actually has other concerns related to the general operation of the business. Although not a certainty, the possibility of a legal action at some point during the lifetime of the business is a relevant concern, and this is why some freelancers and larger firms take out computer contractor professional indemnity cover.
An indemnity insurance policy is geared towards protecting the business in the event it faces a legal claim from a client saying they have lost money because the contractor made a mistake, omission or committed an act of negligence. This can be important because more and more firms are more legally aware and inclined to seek redress through the courts should they suffer what’s sometimes referred to as a ‘financial injury’.
A simple error like deleting a client’s files or not installing software correctly could mean a firm loses thousands of pounds or more, leading them to file a compensation claim. Some companies may be merely dissatisfied or wrongly blame a contractor for something that goes wrong. Even these invalid claims must be defended, sometimes at considerable expense. It is these types of circumstances professional indemnity cover seeks to guard against.
Besides straightforward errors that might be made on a job, an indemnity product will also cover the legal expense of defending a claim for breach of intellectual property rights, or an accusation of breach of confidentiality. A company may also defame a client or other party thorough libel, leading to legal action, and this will also normally be covered. One feature particularly handy for IT firms is the provision of protection should a claim arise relating to loss of a client’s data.
Other handy elements will also normally include public liability cover – useful for contractors which expect to be completing work in public places. Worldwide cover can even be arranged for companies that expect to undertake work in foreign countries.
Time is an important consideration when it comes to legal matters and indemnity cover can be arranged to protect against one or two unwanted surprises. Legal claims can sometimes arrive with no prior warning and can sometimes relate to an event or events which took place weeks or even months before a solicitor’s letter actually arrives. For this reason many people look for computer contractor professional indemnity cover which is ‘retro active’ and guards against claims relating to something which happened before the cover was bought.
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