Spotlight on Common PI Insurance Pitfalls and Tips to Avoid Them
Just as the good old saying goes – prevention is always better than cure and hence you need to make sure that you aren’t in a pitiful state when an unexpected claim is made against your business. Professional indemnity insurance is one of the most effective and important policies designed to protect professionals from unexpected third party claims. Contractors, IT consultants, accountants, and few others should have this insurance to avoid claim made against clients or third parties, following professional mishap or mistake in the advice or services, they’ve offered. The insurance covers liability found and defence costs during the event of claims.
Risk Mitigation
In order to remain safe, you need to keep up with existing needs, especially in a field where you provide legal suggestions. Areas, like management systems aren’t specifically difficult to operate in, but those working in safety, health or environmental management have potentially higher accountability for the damages caused. One of the best ways to reduce risk of possible claims is to ensure that the project/work is well-documented, suggesting best advice to reduce the risk to customers. It is important to record the conversation to make sure that everything is clearly specified and important discussions are dealt and highlighted with on time.
Liability Insurance Can Always Save the Day for You
In today’s line of business, precautions, especially protection against professional risk is a must to operate smoothly.No matter whether you’re self-employed or work for a company, it is crucial to have insurancein place to take care of your business. Though PI insurance helps in many ways, you can minimise your chance of using it, by following few simple things listed below.
Avoiding the Possibility of a Claim Being Filed Against You
Whenever you enter into any agreement, you need to verify the contract properly; do not get put off by complicated agreements and sign off something hastily. Moreover, you need to preserve all the documents, because you’ll need to produce all documents in the event of claim. Check all details and confirm only if you can deliver on prescribed time. Though the policy covers accidental breach of contract, you need to understand the nitty-gritty before signing the contract.
Keep all the copies with you, verifying positive and negative results. Before handing over your work, you need to take client’s approval and by showing copies of client approval document, you can avoid the possibility of a PII claim.
Documenting the Changes and Important Decisions
You may take some decisions along with client and there are chances that you need to change decisions, depending upon deliver ability scopes. Make notes of them along with their impact on your work and send confirmation to customers before proceeding.
If the project terms are varied and agreed upon with clients, it is better to keep all documents, and emails safe, so that you can show the insurance provider the terms agreed and signed by customers. You can also keep mail records, as long as it doesn’t violate security rules.
You can keep dated copies of all notes of calls, and emails as well. Though breach of confidentially is covered by professional indemnity insurance, it is better to check all documents and emails, before sending them.
Don’t Forget to Renew
Lastly, do not forget to renew the coverage, so that you have it when you need it the most!
Alvin Belle works for a finance company that specializes in indemnity insurance for legal professionals.
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Category: Insurance
