Why your client needs Professional Indemnity Insurance?

Professional Indemnity (PI) insurance is designed for professionals who provide design and/or advice services to their clients.  It is not generally designed for clients who undertake blue-collar services such as physical construction, manufacture, installation, repair or maintenance services (although tailored policies exist for construction professionals and design and construct).

Who is a Professional?  A ‘Professional’ is anyone who:

• exercises or professes to have specialised knowledge or skills;
• owes a duty of care to a client or third party in the performance of their professional work; or
• is paid a fee for the advice or design work.

Professional Indemnity insurance provides protection for the insured against claims from third parties alleging they have suffered financial loss resulting from a breach of professional duty, particularly allegations of negligence.

For most industries, Professional Indemnity insurance is not a legal requirement. However, there are many professions that need to have PI insurance as part of their respective industry memberships, for example, Real Estate Agents.   

Even if a person or entity is not obliged to have PI insurance, as a professional within that industry they are responsible for ensuring their advice or services are provided to the required standard.  Without Professional Indemnity insurance if your client is subject to a third-party claim they could be liable for thousands of dollars of legal fees and compensation payments – not to mention lost income from the time spent defending an allegation against them.

Your clients are likely to need professional indemnity insurance if:

• They exercise or profess to have specialised knowledge or skills;
• They are paid a professional fee for their advice or design services;
• They want to protect themselves against allegations of mistakes or professional negligence in work they have undertaken for their clients; or
• They work as a contractor, consultant or a self-employed professional, and your client has requested you arrange professional indemnity insurance for them in order for them to undertake a contract.

Ensuring your clients are covered with the appropriate insurance product is a key aspect to best professional practice for any insurance broker. Therefore, it is important for your clients and their business to have the correct insurance in place.

Berkley Insurance Australia (BIA) understands that your client’s business is important to them. As a leading general insurer specialising in PI insurance, BIA is here to help your clients keep their business safe and secure so they can focus on the more important day-to-day tasks.

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