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Businesses that provide opinions, advice, design or specification run the risk of claims against them if the advice or design turns out to be unsatisfactory. This can happen to the most fastidious and capable of professionals.
Even if you’re not at fault, you may have to spend significant amounts on legal fees to prove that the liability isn’t yours.
Professional indemnity insurance covers the risk of making a professional mistake: an act, error, omission or through conduct or being misinterpreted.
Any business or individual providing advice or design to their clients should consider a professional indemnity insurance policy. This includes:
Whether you believe you are in the wrong or not, if a customer’s complaint relates to a potential mistake you’ve made on the job then there are grounds for legal action against you. Professional indemnity insurance seeks to protect both your assets and your reputation.
This insurance covers both the cost of a claim for compensation the business is legally liable to pay (eg a settlement negotiated out of court or damages and expenses awarded in court) and also the costs of defending a claim.
Our brokers can advise you on the best business insurance solutions to protect you against inadvertent negligent acts and work alongside you at claims time to get a fair resolution.
A health and safety consultant was contracted by a manufacturer to assess its product systems and advise on improving factory safety. Following recommendations, the manufacturer redesigned their production line only to realise the new setup was potentially hazardous in a completely different way.
The manufacturer, having lost confidence in the consultant, brought in a second health and safety expert who reconfigured the set up once again and required a week-long compulsory closure period while the reconfiguration took place.
The manufacturer successfully sued the original consultant and was awarded over $300,000 damages included their legal costs, which the original consultant’s professional indemnity policy paid.