If your business provides professional services or advice, it is important that you safeguard your business and yourself. When a client sues you for dissatisfied service, professional indemnity (liability) insurance will help protect yourself from such claims.
What is Professional Indemnity Insurance cover?
Professional indemnity covers your liability in case of negligence by directors or your business. Court action is the worst case scenario and is usually a last resort. What is very stressful is the threat of court action which may or may not happen. In this instance having a professional liability insurance in place will provide peace of mind.
If cash flow in the business is tight as was the case for most businesses during the pandemic, any court costs and compensation will put big pressure on the businesses finances.
Benefits of Professional Liability Cover
- Lawyer fees
- Administrative costs
- Expert witness costs
- Court costs
- Settlement Costs
- Intellectual property rights: This is where you would unknowingly use a name or logo for example which were the same or similar to a competitor
- Property damage and data loss: You spill coffee on a client’s laptop causing damage and loss of data
- Negligent acts: Staff members or Directors act negligently in their duties for a client
- Defamation claim: This is where your name is affected by actions of individuals or groups
Legal Advice provided by a policy
Added to the above the key benefit of professional liability cover will be the advice you have access to with a policy being in place. A claim does not have to be opened for you to get legal advice. The policy will provide you with a dedicated lawyer which you can discuss a problem with. You may think this type of service will affect your renewal price but this is not the case.
The insurance company will be happy to help you solve any delicate situation you may have with a customer before things escalate.
Professional Liability Insurance includes FREE Access to Lawyers with no worry of hourly rate charges
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The following case studies are excellent examples for the need of “Protection”, and Benefits a Professional Liability cover has
A 2009 case called Estate of Tinervin v. Nationwide Mutual Insurance Co.
The court found that an employee in a medical clinic lost a lab report and failed to report the lab results to the doctor.
In this case the court ruled that the clinic failed in its duties and although a clerical error is not a serious problem in usual cases, in this case it affected a patient and so ultimately the clinic is responsible and damages were given to the claimants.
In this case the owner needed a Professional Liability policy which unfortunately was not in place.
Negligence at work:
A case from 1985 gives a good example of Negligence: Negri v. Stop & Shop, Inc.
A woman in a supermarket fell and hit her head directly on the floor where there were jars of broken baby food. A witness did not hear any jars falling from shelves or breaking in the previous 15 to 20 minutes prior to the accident and the aisle had not been cleaned or inspected for at least 50 minutes prior to the accident.
In this case the court had to rule if the supermarket is liable for failing to notice the spill.
The conclusion to this claim was that the supermarket was not liable as there has to exist a sufficient length of time prior to the accident to permit a defendant’s employees to discover and solve the issue.
This type of claim is common in Restaurants and Bars all over Spain. Protecting yourself in these cases should be taken seriously.
Why is Professional Liability Insurance important in the World today
America is the best place to look for the trends in legal action. The American Bar Association (ABA) reported recently that real estate-related claims are now the most frequently filed among legal malpractice claims. Personal injury and family law claims came in second and third.
These trends do travel over the pond to Europe and being ahead of this will put your business in the best postion and safeguard its future.
No sleepless nights
When things escalate a claim can be opened and all your costs will be covered. Sleepless nights will be not an issue since you know you have no out of pocket costs and will have access to an experienced team of lawyers that are not on an hourly rate.
Who needs Professional Liability Insurance
Spain is by no means a litigious society. For example no win no fee lawyers do not exisit in Spain which stops most unneccessary claims for reaching court. However, the government are currently promoting this type of insurance to cover legal obligations that small business as well as the large corporations potentially could face.
In the past only larger companies or small to medium size businesses paid for this cover but over the last decade this has changed, and businesses of all sizes have easy access to cover at affordable premiums. Feel free to contact us to quote for your business and you may be surprised at the great value prices available.