Professional Services Insurance

Professional indemnity insurance is vital for professionals and consultants operating in various industries. As more manufacturing jobs disappear in the Australian market, the professional services industry, including the business consultancy sector is becoming more prevalent in our society.

More businesses are outsourcing to dedicated providers in a variety of industries including:

• Accountants
• Architects/Engineers
• Business Brokers
• EducationProfessionals
• Financial Planners
• IT Contractors
• Immigration Consultants
• Investment Brokers
• Market Research
• Mortgage Brokers
• Lawyers
• Real Estate
• Recruiters
• Scientists
• Travel Agents

However, as these businesses become more important, more specialised and integrated with different sectors of our economy, it is vital that they keep up with technological change. Some of the difficulty they face is finding quality staff and being able to turn their businesses around to meet modern customer expectations.

What are the exposures?

Exposure for professionals will vary depending on the type of occupation. One area most professionals will have in common is the provision of skilful advice and services. The nature of providing advice has risks attached to it. Anyone can make a mistake, so what happens if someone suffers a financial loss, personal injury or property damage from that act, error or omission from the advice or service that you have provided?

A significant claim against you could lead to protracted litigation and financial loss, not to mention the emotional stress and drain on financial resources.

Every profession has exposures; an accountant may fail to audit a company’s accounts correctly; a dietitian may give wrong nutritional advice or a travel agent may fail to advise a client of the travel conditions in a country they are visiting.

To mitigate these risks and protect themselves financially from claims arising from errors or omissions in their work, professionals often opt for professional indemnity insurance (also known as professional liability insurance). This type of coverage provides protection against legal costs associated with defending against claims and any damages awarded if found liable.

Accountants insurance and engineers insurance are specific types of professional indemnity insurance tailored towards the professions’ unique needs. By obtaining this coverage through a reputable insurer, professionals can have peace of mind knowing that they have adequate protection should something go wrong.

When purchasing professional indemnity insurance policies or seeking quotes; it is essential to carefully review policy terms and conditions provided by the insurer.
When it comes to selecting the most suitable level of professional indemnity insurance, careful consideration should be given to individual circumstances. Factors such as turnover and specific requirements must be thoroughly assessed to ensure proper alignment.

What can go wrong?

The insured was appointed as a managing agent for a commercial property under lease in a suburban shopping centre. When the lease was due for review, the managing agent failed to issue the required notices for the formal review to occur. The tenant argued that the time for the review of the lease had passed. The landlord missed out on the rent increase for 12 months and sued the managing agent for damages.Payout was in excess of $90,000.

In another instance, an IT company entered into a contract to build a front end solution for a customer who operated multi-franchise outlets. The contract was not completed on time due to staffing issues and the franchise operator requested cover to stop and sought damages to the amount of $200,000.