Indemnity cover can protect business owners against claims and lawsuits. Most claims originate from a client if the work completed by a company or consultant was unsatisfactory. PII policies cover any damages owed and legal expenses that may arise if a business is found negligent of incorrect advice, mistakes or improper design, and is considered a necessity in today’s environment.
Business Owners Who Provide Advice for a Living. Coverage is necessary if your business earns income by providing advice to clients. Incorrect advice may lead to a lawsuit. Businesses have been bankrupted after being sued for negligence or incorrect advice. Proactive business owners recognize the risks and indemnify themselves.
Business Owners Who Handle Clients’ Data. Data is an essential part of any business. If data is compromised while in a company’s possession, the company could be held liable. Clients may sue a business if data is leaked, corrupted or erased accidentally. Business owners are held liable if this happens. Confidentiality is a large part of handling any company’s data. Business owners should take every precaution to protect company data and be prepared if an unexpected lawsuit should arise.
Business Owners Who are Responsible for Clients’ Intellectual Property. How organizations conduct business provides the company’s competitive advantage. If the intellectual property that defines a company and sets it apart from its competition is breached, a business owner may be held liable. A business is held liable if the company begins to lose profits as a result of a breach.
Your cover should at a minimum protect the company for up to two million pounds in damages. Many insurance companies can inquire with business owners to determine the amount of cover required to adequately cover a business. With an agents’ guidance, the appropriate amount of cover can be obtained to prevent any potential loss of business due to an accidental oversight, mistake or other negligent behavior.
Public Liability: Covers a business if the business is found responsible for physical injury, damage, disease or illness. The premium may cover both people and property.
Common examples include: Carpet cleaners spilling bleach on a carpet or a plumber accidentally flooding a house. Each instance would be covered since the business owner would be deemed negligent in both instances.
Professional Indemnity Part of the larger umbrella of public liability insurance. It differs from public liability because this type of cover does not require evidence of physical loss. Basically, if a third party receives advice from a business and suffers financial loss as a result, then professional indemnity will be required. This type of insurance policy only covers financial loss. The insurance can be purchased in conjunction with public liability so that both physical and financial losses are covered.
A business owner may have an information technology company that is skilled in replacing business’s IT infrastructure. A business owner may enter the business and provide some of the agreed upon services specified in the contract but not all. If a company suffers financial loss as a result of the oversight or omission, the IT provider could be held liable. A court may award damages for lost sales, inconvenience and reduced productivity. A court may even award money for the cost of purchasing proper services and equipment from another supplier. If the business has cover, the insurer takes the loss, not the business.