To safeguard health, vehicle and residence from danger, many of people opt for diverse insurance policies. However, in some situations having specialised insurance policies can be of great help. One such instance is indemnity insurance. Also referred as professional liability insurance, it is meant to provide legal protection to business owners and professionals when they are considered to have made a misjudgment under certain circumstances- leading to loss of life or money and serious events. Such an insurance plan can be used to indemnify professionals when they are slapped with malpractice and negligence of duty related charges.
Getting the nuances clear
Indemnity insurance can be regarded as one type of liability coverage pertaining to certain service providers and professionals who offer, solicitation, advice and services to specific clients. If a client suffers a financial or other type of loss and files compensation and civil claim, this insurance can be used to safeguard the service provider from paying the money. It can be used to safeguard the professional from other types of damages too.
In most cases, indemnity insurance is used by professionals in legal and financial services. So, you will find a significant number of insurance agents, financial advisors, mortgage brokers, lawyers and accountants using this insurance. At times, these professionals and firms offering these services can be held liable for resorting to malpractice or inadequate performance etc.
Tips for professionals buying Indemnity insurance policies
Buying a professional liability insurance does not exactly mean you are saved from all kinds of client allegations or legal charges but it does offer some amount of support. However, you should analyse the following aspects before purchasing such an insurance plan.
- • Whether you are a legal advisor or run a tax consultancy firm, it is necessary to inform about your profession to the insurance company or broker in advance. This will enable the insurer to assess the risk factors in detail.
- • The Limit of Indemnity may vary from one policy holder to another and it is also dependant on the type of service he or she offers to clients. The premium amount may vary from one profession to other as well.
- • After you sign up for an indemnity insurance policy, you should not attempt to settle any claim made by any client or involved third party without informing the insurer. Doing so may nullify your chance of getting coverage from the insurance provider. You should not hire a legal practitioner to investigate cases pertaining to such claims without the consent of the insurer either.
- • If you already have such an insurance plan and you want to change to a new insurer, make sure the new policy has a feature called ‘Retroactive coverage’. This basically means the new policy will offer coverage from claims and charges based on work done before the new policy was obtained by you and you were covered by previous plan.
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