In the business world, any claim filed in relation to a breach in professional conduct can cost a great deal of time, aggravation and money. This is indeed the case regardless of whether the claim is valid or it is found to be unfounded. Not only is the business owner in question held responsible, but any employees or partners that are working for the company are just as liable. So, a type of protection known as professional indemnity insurance is a desirable form of protection.

The Types of Professional Indemnity Insurance

One of the most common policies is known simply as occurrence coverage. In other words, this package will offer the business ample levels of protection for any injuries or damages that occur while the policy is active. Note that this is irrespective of when the claim is initially filed. In other words, long-term protection can be enjoyed for a claim that is reported in the future (assuming that the policy is still in good standing). In this case, the underwriter will be responsible for any costs that would arise.

The second category is known as claims-made coverage. As above, any claims filed will be covered as long as the policy remains valid. Unlike occurrence coverage, claims-made premiums will tend to rise annually; the likelihood of a claim being reported will increase as time goes on (note that a claim from the past could also occur). Still, such a plan is generally offered on a yearly basis. Thus, a business always has the ability to switch providers (and find more agreeable rates).

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Things to Take into Consideration

Professional indemnity insurance is geared towards businesses and individuals that offer specific advisory services within a field. Thus, positions such as architects, doctors, engineers and law firms should especially consider this type of plan. However, there are a handful of exclusions that are important to note. Some of these will include employee liability, vehicles, acts of god and financial insolvency. If a business considers any of these factors a possibility, additional levels of coverage (and even separate standalone policies) may be warranted. Obviously, another factor to take into account is the cost of the premiums that will need to be paid in relation to the levels of coverage expected should a claim arise.

Finding the Best Deal

Some additional steps that will help a client encounter the best package are:

  • Comparing at least three different providers.
  • The retroactive date (that is, how long into the past the policy will offer claims protection).
  • The inclusion of libel and slander into a package.
  • The transparency of the provider and the levels of customer service.

These metrics will help to clarify while insurer will offer the best services.