If you are a provider of professional services and advice to clients, it's important to insure against potential claims and disputes arising from your professional service that could lead to expensive and time-consuming litigation. Here's how Zest Insurance can help.
What is Professional Indemnity insurance?Professional Indemnity insurance is designed to cover claims arising from professional mistakes, negligence, or inadequate work provided to clients or customers as a result of your professional services or advice.This could include anything from errors in data entry, incorrect advice given to clients, or failure to deliver services to the professional standards.
Why do you need Professional Indemnity insurance?
Holding Professional Indemnity insurance is a smart business choice for small businesses that provide professional services, because human errors do happen! Professional Indemnity insurance provides you with a level of coverage that may assist you if a claim is made against you or you are required to pay or defend a professional negligence claim.
Additionally, Professional Indemnity insurance is a registration requirement for some occupations, in order to comply with legislative requirements. In Australia, this includes such occupations as bookkeepers (including registered BAS agents), accountants, lawyers, engineers and more.
It’s also a requirement of many service-based industry associations and may be expected by clients wishing to engage your services.
Some industry standards or specific projects may also mandate it.
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Key features of Professional Indemnity insurance from Zest InsuranceOur Professional Indemnity insurance is relevant for small businesses that provide professional services and includes coverage for actions such as*:
Professional negligence Negligent advice or misleading information that may have been inadvertently provided.
MisrepresentationClaims arising from unintentionally false or unintentionally misleading statements made during the course of professional duties.
Accidental breaches of confidentialityAccidental unauthorised disclosure of confidential client information.
DefamationUnintentional libel or slander committed in the course of professional work.
Intellectual property infringementAccidental infringement of copyright, trademark, or other intellectual property rights during professional activities.
Loss of documents/data belonging to clientsLoss, damage, or theft of important documents or electronic data belonging to clients.
* Please refer to the Zest Insurance policy documentation, underwritten by Chubb Insurance Australia Limited, for full details of cover!
Unpacking the essentials of Professional Indemnity insurance
This Zest Insurance article will help to ensure you don't overlook crucial elements when it comes to your Professional Indemnity insurance:
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Consider the impact of making a professional errorHere are some examples of potential Professional Indemnity claims that illustrate how easily incidents can impact small businesses**:
BookkeepersMaking errors in financial records that result in financial losses for clients.
Accounts ClerkProviding incorrect financial advice that results in financial loss for a client, such as misreporting income or expenses.
Business ConsultantProviding recommendations or advice that leads to negative outcomes for a client's business, such as implementing ineffective strategies or misinterpreting market trends.
Payroll ClerkMaking errors in processing payroll, such as incorrect tax withholding or payment calculations, leading to financial losses for employees or regulatory issues.
** These examples are hypothetical, based on the types of scenarios that could potentially lead to a Professional Indemnity insurance claim for a small business. All claims are assessed by Chubb on a case-by-case basis and are subject to the terms, conditions, exclusions and limits of the Chubb Multipack Policy Wording.
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