Public indemnity insurance protects you from claims and legal costs arising from defending against compensation claims. If you, as a member of public, in professional capacity, are deemed by a client to have provided inadequate service or advice, then you can face public indemnity insurance charges.
Situations where you may face such charges include professional negligence, loss of data, breach of trust, breach of copyright, libel, and loss of goods or money.
Public indemnity insurance is not a legal requirement; however, it can save you a lot of bother and give you the peace of mind that you are covered against situations that consultants and service providers have to face. Also, many industries require that practitioners have a minimum level of insurance cover, and often this cover includes professional indemnity cover. Accountants, teachers, financial advisors, mortgage brokers, designers, fitness professionals, architects, lawyers, and those who offer consultations need this insurance even if they seek employment on a contract basis. In fact, many firms make public indemnity insurance a requirement for bidding on contracts.
Legal requirement apart, without this insurance you may end up paying thousands of pounds as compensation and also spend significant amounts on legal costs. You would be spending time pursuing such cases instead of working on your business. Your brand will suffer, and you may lose out on lucrative projects.
Such claims can be a drain on your professional and personal financial resources. This holds true for both small and large businesses. You must work with the assumption that even though you strive to provide the best possible service, mistakes will occur. And when this happens, you may face liabilities. Only adequate and appropriate insurance can bail you out of such situations.
You cannot depend on your relationships with a client to escape financial indemnity for a mistake. Compensation is a client’s right. The right kind of professional indemnity for your business will depend on the kind of work that you do and the risks that you face. If you seek cover for a particular contract, then the extent of cover will most likely be decided by the client. As a rule of thumb, calculate legal costs and claim amount for the worst mistake that you could make and obtain cover for that. This should give you financial backing for all scenarios. Public indemnity insurance fills a vital gap that general insurance does not cover. Regular commercial liability insurance may protect against costs related to property damage and bodily harm but do not offer security against claims related to failure in performing one’s duty and possible negligence. Even if the mistake on your part is inadvertent, you have to be ready for a claim that could come your way. Basically, this insurance protects you from mistakes that happen due to errors and omissions, and sometimes downright negligence. Public liability insurance also protects employees’ deferred compensation from a company going bankrupt or facing claims from clients. When seeking public indemnity insurance, check the policy document to ensure that the insurance will protect you against claims filed during the time the policy is in force. Ask the provider if it can create a policy with a retroactive date. Such a backdated policy lets you avail security for work that you carried out when you were uninsured.
Getting a quote on public indemnity insurance is quick and easy. You may want to consult the insurance provider for the right amount of cover given your trade. It is possible that your trade may not be covered for this insurance. In such cases, a separate public indemnity insurance policy can be made for you.
The investment in this insurance is not high, but the peace of mind that accompanies this investment is well worth the money you spend on this insurance.