Business and Risk Mitigation
Running a business boils down to a simple formula of selling your products or services at a profit. If only the reality were as simple as the formula! Unfortunately life – error, lack of judgement, fraud, accident, act of God – can all get in the way and prevent you from making your business transactions successful.
Therefore, businesses take preventative action to mitigate these risks by taking out insurance. Insurance can be the difference between a business going under due to nasty surprises – such as theft or fire – and being able to bounce back with minimal further consequences.
What is Covered in Your Business?
The chances are your business already has suitable insurance in place for its tangible assets – building, contents and vehicle insurance, for example. However, more difficult to quantify are professional qualities such as knowledge and expertise. If your business’ work involves working with industry-specific knowledge and data, and offering its clients advice, you are likely to benefit from having Professional Indemnity (PI) Insurance.
What is Professional Indemnity Insurance?
PI Insurance covers the professional knowledge-based work your business carries out for its clients. If your business makes a mistake, and this mistake affects your client in some way – its reputation or finances for example – resulting compensation claims and legal fees are covered by PI Insurance.
Mistaeks Happen
Unfortunately mistakes happen in all areas of life. This could include accidentally misadvising a client, or writing a letter or article containing false information. This doesn’t mean you’ll always get caught out, and if your business is pulled up there may be no further problems. However, whilst you might feel your business is fairly watertight in this area, it is far better to be safe than sorry. If your client loses money or suffers reputational damage as a result of the work that you have done for them, do you want to be the one picking up the bill?
Do I Need It?
If your line of work involves offering advice or the use of professional knowledge, you should speak to someone who can help. Finding the right level of cover for your business might not be as costly as you imagine, and PI Insurance can give you the peace of mind to carry out your job without hovering clouds of anxiety, which could actually prevent you from offering your best service to your clients.
PI Insurance can still benefit businesses who rarely rely on their professional knowledge as part of their service. Because of the less severe element or risk involved, premiums will be even more affordable, meaning you have a very cheap safety net should you ever need to use it!
In Summary
If you are a key decision maker within the company you work for, take a few minutes to analyse the work you do; even if you don’t think PI is for you, you may want to gain advice from a professional.
Have you ever been misadvised by a professional? What happened?
What does the Professional Indemnity Insurance have to with the type of my business?