Professional indemnity insurance is designed to protect businesses from liability. This could be in the form of loss, damage, injury or negligence claims made by clients. Businesses that offer services or products based on professional knowledge should have professional indemnity insurance. Some specific professional fields that need to have professional indemnity insurance include firms providing legal service or architectural services. Also, accounting, information technology and financial service fields need to have professional indemnity insurance. When looking for a professional indemnity insurance policy, there are some things to keep in mind in order to help obtain appropriate coverage. There are several key aspects that will influence the amount of your professional indemnity insurance premium.
One thing that determines the insurance premium is the nature of the business. The type of services being offered by the business directly correlates to the inherent risks of that business. Perceived risks are used to calculate premiums. Many professional indemnity insurance policies can be tailored to provide protection to certain fields based on their common risks.
The level of risk is another determining factor. Certain businesses are at a much greater chance for serious claims than others. For instance, an architectural firm could be sued if they structure they designed collapses and injures people. However, the impact of a data error from an information technology firm isn’t going to have as great of a risk because it will not potentially cause human injury or death.
Another piece of information that will determine the premiums for professional indemnity insurance would be the company’s history. This would be your company’s history with other claim. There could be claims dealing with advice, damage, injury or negligence. If a company has already had several claims filed against them then they are perceived as a greater risk than say a company who has had no claims made against them. As a result, the premiums for the company with claims made will be higher.
