A professional indemnity insurance broker or agent is one who is familiar with financial planning and receives a commission for guiding you as you seek the best professional indemnity insurance coverage for your needs. Most individuals get a bit confused when they have so many options to consider. They prefer using the expertise of someone knowledgeable in the field. For assistance in choosing the right agent or broker, one can use the Internet to get a list of reliable agencies or professional indemnity insurance brokers in the area.
An insurance broker generally does not work for the insurance companies. They take up individual case studies, make surveys, bring back the best options, and guide you as to the one most suited to your needs. For this, the broker expects a commission. Brokers receive a commission on every sale they make. An insurance agent, on the other hand, works for a company or many companies and receives a commission for every client he or she brings in for the insurance company. Therefore, they try to sell you the product of the companies they work for and can provide up to date information for you regarding those companies.
Since brokers link themselves to multiple companies, they can provide a wealth of useful information as intermediaries in the financial sector. Some insurance brokers belong to big commercial business establishments where they involve themselves in specialized fields to cater to clients with specific needs in a particular area. If they choose to work in a small area, then they take on the job of personally filling in the forms and delivering it to the insurance agency and the client who gives them business.
The work of a broker does not stop with getting a client. The insurance broker has to be available for the client when a situation arises, especially if there is an accident or damage to property due to theft or vandalism. A good insurance broker will make sure his or her services to the client in order to have their continuous business. By having a broker who is always working diligently, the client feels his or her investment is secure and recommends that broker to their family and friends. The broker makes sure that premiums reach the insurance office regularly and on time and keeps the client updated on new policies when it is time for renewal, and informs the client when they can change to a better plan.
Whether they work as a professional indemnity insurance broker or independent agent, a broker's trustworthiness and capability ensures a quick rise to success. An insurance broker ideally is a sales person with good communication and verbal skills. A successful broker is persuasive and positive in their approach. If their disposition is pleasant and they display patience, the insurance broker can go a long way towards ensuring client service and obtaining referrals to pave the way on the road to success.
Professionals are accountable for their actions every time they undertake work for a client. This means that even a simple mistake, a misunderstanding or disagreement with a client can potentially lead to an accusation of negligence and an expensive law suit.
If a claim is made, the professional will have to cover the costs of defending the claim. This invariably means, at the very least, incurring attorney's fees, and in the worst case, paying damages and the claimant's legal costs as well. Errors and Omissions insurance is designed to protect professionals against those risks.
Errors & Omissions insurance was previously required only in traditional professions such as architecture, engineering, law and medicine but today it has become a vital form of protection for consultants in any field such as Information Technology, design, marketing, business consulting, real estate and recruitment. Also known as Professional Liability Insurance or E&O insurance, the insurance covers the financial consequences of either an error - something a professional has done wrong, or an omission - something the professional has failed to do.
Claims frequently arise from disputes deriving from confused communication between the professional and client, or a perception that the professional over-promised. Even if there are no obvious 'errors' or 'omissions', this may not stop a client from alleging negligence. This means even the most diligent professionals are at risk from a client claim and the associated cost of defending themselves.
In the event of a claim, professionals will often have to defend themselves against clients with deeper pockets who can easily afford the cost of litigation. An Errors and Omissions insurance policy from a reputable insurer helps level the playing field.
What's more, professional liability litigation is often outside the expertise of the majority of commercial lawyers, which can make it hard for the professional who doesn't have coverage, to find a suitable lawyer. An E&O insurer, on the other hand, will have access to lawyers who specialize in professional liability litigation and negligence lawsuits.
Smaller clients may choose to hire attorneys on a contingency ('no win, no fee') basis. The professional without coverage will have to find a suitable law firm, pay a sizable deposit, and pay for any of their attorney's costs as they arise - whether they win or lose the case - as it is unlikely that the court will award costs in their favor.
Many professionals seek the protection afforded by forming a Limited Liability Company (LLC) - but the company will still need protection against claims of negligence from clients. Errors and Omissions insurance will help protect the company's assets and if it doesn't have assets, the policy will also protect the directors' or officers' personal assets.
Even if the professional individual or firm adopts the best in-house processes and procedures, does the best work, and never makes a mistake, it may not stop a client from making a claim alleging negligence. The coverage of an Errors and Omissions insurance policy will help to minimize disruption caused by a law suit and protect the reputation and finances of the business.
Why should a company have business insurance? Perhaps the number one reason for not having coverage is the financial costs involved. The logic is probably a common one. Why get insurance if it costs too much and nothing has happened to warrant the need for insurance anyway, right? Wrong.
Few things can put you and your company at risk more than unforeseen disasters. You are quite literally one big storm or one major lawsuit away from financial ruin if you don't have some form of adequate coverage for you business -- no matter how big or small it is.
Furthermore, what some perhaps some small business owners or self-employed individuals don't understand is that any business is at risk of being sued for all kinds of reasons. No one can physically protect themselves from every conceivable disaster that can happen at some point in the future. It's why insurance exists. It's why you need business insurance. It's why you need to make the investment in coverage to protect everything you've worked for in establishing and growing your business.
Similarly, one of the greatest risks to some firms is the prospect of being sued for professional misconduct. It's the reason why some businesses need professional liability protections as part of their insurance coverage. Without it, one lawsuit for professional misconduct can not only put your business in serious financial risk, but it can also affect your reputation and those associated with you. Without liability protection, you can be one step away from jeopardizing your professional status permanently.
In fact, if you're a successful and growing business, the amount of people you affect with your activities could be unlimited. The services you provide or even outsource to others could become the subject of litigation without even the slightest of warnings. It is literally impossible for any business to protect themselves from every possible lawsuit without some form of professional liability insurance.
Think about the extent to which your professional conduct can have an impact on others, and the extent to which those activities put you at risk of litigation. You provide direct services to clients. Those clients turn around and use your work in the conduct of their business. This impacts their clients, who use that work to impact others, and so and so forth.
It can literally take years for something to become the subject of litigation at some point in the future. Without professional liability protection as part of your business insurance coverage, a lawsuit can strike and you won't know what hit you. This can be avoided by smart businesses that protect themselves with foresight and the proper coverage.
What some business owners aren't aware of is that some jurisdictions won't even allow you to have a license or conduct business without insurance which can include professional liability coverage. Some businesses won't deal with you unless you have professional liability coverage because they don't want to be the subject of a lawsuit themselves. By getting professional liability coverage as part of your business insurance coverage, you're essentially engaging in good business practice as well a protecting yourself from the risk of litigation big or small.
Now, some business owners or professionals might think that their conduct is above reproach. For that reason, they might think that things like professional liability insurance coverage are unnecessary. If you do everything by the book, and provide the kind of service and professionalism you know you're capable of, some people think that's good enough.
There are two basic reasons why this thinking is flawed.
The first is that you're human. You're going to make mistakes. And all it takes is one mistake and you could be ruined. As much as it might be comforting to think that it will never happen to you, the prospect of it happening should be of enough concern to you. Think about it. It's after disaster happens when you say to yourself, "I should have seen this coming." By getting professional liability coverage as part of your insurance package, you did see it coming and did something about it to avoid disaster.
The second reason you can't rely on your own conduct is that you simply cannot imagine how frivolous or innocent a lawsuit or allegation can be, and how costly it might end up if you find yourself having to fight it. By having business insurance with liability coverage, you almost take all the worrying off the table. It's only at that point that you can truly feel comfortable in relying on your professionalism and conduct. If the truth wins out, then adequate insurance coverage makes that victory a less anxious and worrisome one.
As much as business owners and professionals would like to think that they won't be struck by lighting, or that business insurance is too costly, it's only smart and prudent to ensure that you have the right coverage that includes professional liability. Otherwise, one morning you might wake up and notice you've been served with a notice of litigation, and your business life can flash right before your eyes.