Getting Effective cover to meet AAT professional indemnity rules
Members of the AAT have to have professional indemnity insurance in place as a mandatory requirement. For some professionals this might pose the question of where do I get it and how do I make sure it is affordable? Professional indemnity insurance comes in various different levels and can protect all sorts of circumstances. AAT professional indemnity can be professionally designed by the insurance company in question which can provide added peace of mind that the policy someone ends up with is suited to their needs.
AAT professional indemnity pays out in the event that the policyholder faces a legal claim that they have made a mistake in the conduct of their business. This might arise if a client feels that they have lost money because of the advice given to them by a professional.
A legal challenge will mean hiring legal help to defend a case, which can be time consuming and expensive. Professional indemnity will pay for someone’s legal bills, and even pay the cost of compensation should it be awarded against them, up to set limits.
The typical elements of an indemnity policy include protection if somebody is accused of breach of confidence or copyright, and protection if they are accused of making a mistake, omission, or even committing an act of negligence.
Indemnity insurance can be bought which covers a company and its various partners or employees, or which covers an individual. Broader policy elements will even protect the policyholder should the firm face a claim that an employee has acted dishonestly, and perhaps defrauded a client, for example.
Protection like this can also include other options, which may come as standard or need to be added on, perhaps for an extra fee. Some common additions include what is known as runoff cover, which is a period of extra protection which can be applied as a professional winds down a business, retires, or changes insurer. This can ensure that somebody is still protected in any vulnerable period where they are not trading but may still be liable for legal action.
There is also an element to this form of cover which is known as retroactive protection. This refers to an element which will provide cover for a legal claim which arrives in future but which actually dates back to an incident which occurred before the cover itself was actually bought. For this to be valid, a policyholder must not have had indication that a legal claim was imminent when they took out the cover.
AAT professional indemnity can be bought at a level which is appropriate to a business, and policies are typically tailored so they provide a level which is at least equal to the AAT requirements.