If your business provides professional services or advice, it is important that you safeguard your company or yourself if you run a business. When a client sues you for dissatisfied service, professional indemnity insurance can help you protect yourself from such claims.
What is Liability insurance?
Liability insurance also known as commercial insurance protects you in the event you are sued for claims that come within the coverage of your “liability insurance policy”.
What is Professional Indemnity cover?
Professional indemnity covers your liability in case of negligence by directors or your business
Following case studies are excellent examples for the need of “Protection”
1. Administrative Errors
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.
2. 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.
Professional Liability 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.
Personal injury claims have always been the most common reason for Legal malpractice. However a report by the ABA has claimed that during the period 2008 to 2011, personal injury claims were not the most prominent claims.
The most common attorney errors leading to the reported real estate-related claims were in “preparation, filing, and transmittal of documents,” according to the release. “Advice” was second on the list.
Summary of current state of Professional Liability
For the above reasons it is very important now days to cover your business. Spain is by no means a litigious society. However even the government has put legal obligations in place to cover small business as well as the large corporations. For example for the last 3 years many businesses from small bars to a real estate offices in Spain now need professional liability insurance in place before opening their door for business.
Reasons for Professional Indemnity Insurance
If customers or even staff members feel you have acted negligently the threat of litigation will be greatly stressful to the whole business. The costs of which also can be high. For this reason it is more important now than ever that you have Professional Indemnity insurance.
Cover includes costs paid for
- Lawyer fees.
- Administrative costs.
- Expert witness costs.
- Court costs.
- Settlement Costs.
Key Features not mentioned above which are covered
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