One of the best aspects of indemnity insurance is that it protects people from claims made by clients for a variety of issues. These issues include malpractice in the medical field, negligence or poor advice situations, even when these issues accidentally. Clients or patients must prove their case beyond a reasonable doubt within a court of law, and these legal proceedings can become costly. It is often too much of a burden for people to be able to handle these costs on their own, especially when it is time to pay lawyer fees. Indemnity insurance fosters confidence within a company as well.
Some people believe that this type of insurance fosters a team atmosphere. This is due to the fact that the insurance is provided by a collective effort. Everyone who joins this club contributes some of the finances to the insurance. If the costs associated with a particular case exceed the amount in the pool, then workers are often asked to contribute more. When a community of workers contribute to these funds, it brings people together much more closely. Knowing that other people within your company have a vested interest in your financial success is a great feeling.
Indemnity insurance provides an opportunity for flexibility as well. All businesses are different, and coverage options vary depending on the potential for use. It is hard to predict when and if a client will bring a claim against a professional. The nature of that claim also determines the amount of coverage required to meet the needs of the professional. This type of insurance helps to right the perceived wrongs brought about by client claims.
It is important for anyone who provides a service to get indemnity insurance. Sometimes it is required as a condition of employment, as everyone within an organization is expected to contribute to the pool. Choosing the right amount of indemnity insurance becomes a bit more tricky if you are a self employed consultant, however. You must weigh the potential costs associated with providing a defense for yourself. Additionally, you must consider the abilities of your clients to sue you for malpractice. If you are found to be at fault, you must also consider the level of compensation that you might be required to provide in such cases.
Sometimes it is difficult to envision a scenario in which professional indemnity insurance is required. This is especially true for well established businesses who see frequent success, without many issues from clients. However, it is a huge mistake to assume that your practice will carry on flawlessly for the duration of your life. You must plan for the unexpected, and allow yourself to have financial backing if such issues do occur. Client compensation and legal counsel bills can mount quickly, thus becoming overwhelming. Protect yourself by getting indemnity insurance as soon as possible.