What is professional indemnity insurance?
You have your own company, business is going well. There is plenty of work and you can put some money aside to save. But what if you are held liable for financial damages? In this case, a small mistake can have major consequences. For example, a liability claim can be very expensive.
To be protected against this, it is best to take out professional indemnity insurance. But what exactly does this insurance protect against? And what should you pay attention to when choosing the right insurance?
For whom is professional indemnity insurance?
A professional indemnity insurance can be taken out by anyone who runs his own business. It does not matter what kind of company you have. However, the insurance is mainly taken out by freelancers and SMEs.
When do I take out professional indemnity insurance?
Do you have your own company? And do you often have to provide advice or work with sensitive information? Then it is wise for you to take out professional indemnity insurance. It is possible that you provide incorrect information to a client. This could cause a project to be delayed. This often leads to considerable costs. To be protected against this, it is a good idea to take out professional liability insurance.
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Difference professional liability and AVB
Please note that professional indemnity insurance is different in content from liability insurance for companies (AVB). The difference between them is that an AVB covers injury/loss of earnings to a third party. A professional indemnity insurance is only for a financial loss or damage to property.
What does professional indemnity insurance cover?
A professional indemnity insurance covers damages caused by professional errors. Think for example of giving wrong legal advice, or making a mistake on a construction drawing as an architect.
What is not covered?
Personal injury and property damage are never compensated under the professional liability insurance. This is only covered by the AVB insurance. Have you knocked over a pile of bricks and they break in half? Then this damage is not covered. Do you order a number of bricks and give the wrong measurements? Then this is covered by your professional liability insurance.
Have you deliberately caused financial damage? Then, logically, this will never be reimbursed. Incidentally, deliberate action is usually not covered by any type of insurance.
If you are held liable as a director/commissioner/supervisor, many insurers will not compensate you for the damage.
Has any damage been caused by, for example, fraud? Then, of course, this will never be reimbursed. This also applies to damage caused by theft and forgery.
Damage caused by not achieving agreed goals/results is also not covered by your insurance. This also includes the exceeding of agreements made with regard to costs/ project duration.
What do you need to consider when you want to take out professional indemnity insurance?
Do you want to take out professional indemnity insurance? Then please consider the following points.
Do I need professional indemnity insurance?
Think carefully about the line of business you are in. This insurance is worth considering if you mainly give advice to customers. If you only have an executive role, this insurance is probably not necessary. Of course, it should be noted that it is better to be insured than not.
Policy conditions
Take a good look at the policy conditions of various insurers. It may be the case that one insurer covers more than another. It is wise to check this to avoid surprises later on.How good is my insurer?
How quickly does your insurer pay out? Is it often a lot of fuss before they pay out? Are the policy conditions not too strict? How does an application go? And how good is the customer service? Find out these kinds of questions before you decide where to take out your insurance.
Need professional liability insurance? Alpina is here for you!
Take out your professional liability insurance now easily and quickly at Alpina. You can request a quote without obligation or calculate your premium yourself. You always get 14 days of reflection time. Do you have any questions about calculating your premium or taking out your insurance? Feel free to contact our customer service.
Calculate the premium for a professional liability insurance directly!
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