Good question. You? The business next door? If not them, who? Everyone?
Pinning down who needs professional indemnity insurance means partly dealing in real, tangible things and partly in concepts and emotions.
Sounds a bit deep, doesn't it?
Don't worry, it isn't. But it's difficult to address the 'what's in it for me?' factor without first peeking behind the curtain.
That means looking at the features and benefits.
What professional indemnity insurance does
If you're looking around for professional indemnity insurance, it's likely you've seen a few explanations of what it is and what it does.
And if you have, we bet you've come away with something like this ringing in your ears:
'Professional indemnity insurance protects your interests in the event of a dissatisfied client making an allegation of professional negligence against you.'
A stilted explanation like this doesn't really answer your question. And while it's certainly true, it doesn't feel like a good enough reason to reach for your wallet either.
Because that's a feature. You need the benefit.
Playing the blame game
We'll deal with the 'protects your interests' bit in a sec. First, let's look at the 'a dissatisfied client making an allegation of professional negligence against you' bit.
You're a professional person with a particular set of skills. Your clients pay you to unleash those skills for their benefit. It might be designing/creating something, giving advice about something or completing a specific task that they can't do themselves.
Now, because they're paying you, they have a right to claim their money back – along with compensation or damages too – if you haven't done what they asked and it's cost them. Or even if they think you haven't done what they asked.
If things don't go according to plan, it won't be long before your clients start looking for someone to blame. Hello, 'allegation of professional negligence against you.'
But that's only half the story. Blame culture is everywhere and claims can be made by people who aren't even your clients. Anyone can say you've copied their work, for example. It's dog eat dog out there.
The good thing is genuine negligence is rare. Most professional people are exactly that and do a grand job. Ironically, you need the most help when you haven't actually done anything wrong – spurious accusations happen all the time and are ferociously expensive to fight.
How professional indemnity insurance protects your interests
Now for the 'protects your interests' bit.
If you're on the receiving end of a claim, regardless of its validity, it's going to be emotionally and financially draining. You'll be confused about the legal stuff and worried about what's going to happen to you and your business.
The only certainty is the sleepless nights.
Can I afford a long legal battle? Or even a short one?
Will I have time to deal with this and look after my clients?
Who can I go to for advice?
What happens if I lose?
These things – your time, your money, your business, and your reputation – are all 'your interests'. These are the things your policy 'protects'.
How? Well, your insurer has two essential things that you (probably) don't: legal expertise and deep pockets. It hands the legal stuff to its solicitors to prepare your defence and fight your corner. It pays their bills and compensates your client if needs be too.
You have to give them the stuff they need to help, of course, but otherwise you can more or less let them get on with it.
No eye-wateringly expensive bills.
No Legal Action For Beginners all-nighters.
No lost clients.
No lost reputation.
Just business as usual.
So, who needs professional indemnity insurance?
More than just a certificate and a ticked box, professional indemnity insurance is a brilliant mix of counsellor, legal expert, comfy sofa, bodyguard, PR guru and exceptionally large money box.
And, really, who doesn't need those?
The answer, then, is pretty much everyone who runs a business and values not only that business but their own peace of mind.
There's more about professional indemnity cover here.
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