Mistakes or omissions in the service industry are often unintentional. A doctor won’t recommend a procedure that can harm a patient in any manner. An architect won’t approve a structure if it has not been built according to the building standards or a financial planner wont recommend a strategy that doesn’t suit a client’s risk profile. However, that doesn’t mean a service provider (a doctor, architect, financial planner, consultant or a web app development firm, for example) is not exposed to claims of physical/financial damages incurred by the recipient of his/her service in addition to any legal costs involved in defending a claim. Even if you’re doing your job right and following all rules and regulations, there’s still a possibility that some of your clients may feel that you didn’t fulfill your obligations and worse still, are able to prove it in court!
Professional Indemnity (PI) Insurance – The Basics
If a customer incurs financial loss or gets injured due to the service/advice you provide, he or she can initiate legal action against you for compensation. Should a situation like this arise, a Professional Indemnity (PI) Insurance policy will protect your business, andpersonal assets. Everyone providing a service should, therefore, inquire with their business insurance provider about the PI cover they actually have!
Are you a ‘Professional’? Should you have PI Cover?
The legal definition of the word ‘professional’ or an ‘expert’ in a field was revised recently in Australia. Earlier, only people working in medical, engineering, accounting and a handful of other professions were legally defined as ‘Professionals.’ The business world over the years has evolved a great deal and so has the legal definition of the word ‘Professional.’
Today, the definition applies to dozens of specialists working in a wide range of different fields. That said, if a physical, material or financial loss is proved to be the outcome of a service or advice you offered, you’re liable to compensate for the same! There can be no escape except when you are covered by Professional Indemnity Insurance.
Also, if you fail to maintain the quality of service promised (or required by the applicable laws in your profession), you’re exposed to legal claims.
So, whether you’re a consultant, health worker, engineer, real estate agent, graphic designer or anything else, it’s advisable to consider buying Professional Indemnity Insurance in Australia.
Is it Mandatory to buy PI Insurance?
For some professions – yes, it’s mandatory in Australia to have Professional Indemnity Insurance. Accountants, medical practitioners, lawyers, insurance brokers and some contactors in Australia are required by law to do so. The minimum coverage requirements as well as the terms & conditions for PI can vary depending upon the industry you’re in.
Who is covered when I buy a PI policy?
A typical PI insurance policy not only covers your business (whether a registered business or privately owned company) but employees, and directors too.
Professional Indemnity (PI) Insurance in Australia
Irrespective of the profession you’re in, it’s advisable to have sufficient insurance cover in order to maximise your financial and legal protection in the event of an unexpected claim at the most unanticipated hour.Google+