As a business owner, you want to protect your company in any way possible. Professional indemnity insurance in Singapore, also known as PI insurance, protects you if a client or customer alleges that your service, advice, or design was inadequate, did not meet expectations, or caused financial loss to the client. It would cover any legal fees and expenses incurred in your defence and any damages or costs your client might encounter.
What is professional indemnity insurance?
When explaining professional indemnity insurance in Singapore (PI), it is necessary to have a precise definition of the term. It is essentially an insurance product designed for companies, firms, and individuals that protects them if they commit errors in their business. The available policies cover primarily professional negligence, errors or omissions, breach of professional duty, and civil liabilities.
This type of insurance allows professionals to work without fear of being sued by a client or a third party for issues arising from their professional activities. It permits professionals to carry out their duties with greater assurance and tranquillity.
Professional indemnity insurance in Singapore provides professionals with much-needed financial protection against the risks and personal losses to which they are highly exposed. This insurance dates back to London in the eighteenth century. As a guarantee of the quality of their work, accountants, lawyers, and architects practised unlimited liability at the time.
When they made a mistake, they compensated their client with their funds, subject to the value of their assets. Therefore, if the error was grave – they could lose their funds to help their clients. Consequently, creating insurance to protect against such losses was a necessary response.
Nowadays, the increasing reliance of businesses on the contracted services provided by various occupations has significantly expanded the definition of the term ‘professional,’ which applies to any individual or organisation that gives specialised advice or services. Without adequate professional indemnity insurance coverage, errors can still cost a professional their livelihood and reputation.
What does professional indemnity insurance cover?
Typical professional indemnity insurance coverage will cover many expenses arising from allegations of professional negligence. Initially, professional indemnity insurance assists with legal fees you or your business incur due to a claim. These costs may include both courtroom representation and investigation.
Once your company encounters a claim or allegation of negligence, it is crucial to remember that sometimes the only way to rectify the situation is with the help of a competent legal counsel. Costs can run into thousands of dollars for such an endeavour. It is an imperative coverage under most PI policies, as it reduces the likelihood of paying for legal fees out of your pocket.
Do you need professional indemnity insurance?
Many professions need professional indemnity insurance because it is part of the rules set by their industry groups. Even if you’re not required to have PI and WICA insurance, not having it could cost you thousands of pounds in legal fees and compensation, not to mention the time you’d spend defending yourself against any claims.
Occasionally, it does not take much for customers to decide they are unhappy with your service. If a client took legal action against you because they believed that your service or advice caused them to suffer a loss, the resulting financial hardship would be difficult for your company to bear. Even if the allegation or claim is without merit, you could easily incur thousands of dollars in legal fees defending yourself. As a small business owner, acquiring such money would likely be difficult.
Professional indemnity insurance in Singapore is, therefore, a crucial coverage for businesses to consider obtaining, as it provides a safety net if your company succumbs to professional negligence.
Where can you purchase professional indemnity insurance?
Professional indemnity insurance coverage is a sophisticated form of commercial coverage. When arranging this coverage, most businesses need to customise their policy to ensure that it protects their business needs. It may involve a minor adjustment to the policy or more substantial factors that truly matter in the event of a claim.
The purchase of this type of corporate insurance in Singapore online is discouraged, and your team should always consult a broker. A broker with the appropriate expertise is indispensable for ensuring that you purchase the right coverage at the right price. They will understand your company’s requirements and help you identify potential risk areas that you may not have identified yourself.
How do you get professional indemnity insurance?
Contact your governing body to determine if you or your company need professional indemnity insurance coverage. Your industry may require PI. If it’s not required – consider whether you advise clients as a consultant or PR agent. Professional indemnity insurance is a policy you should consider if your clients pay you for your expertise and advice.
How to file a professional indemnity insurance claim?
It can be hard to know when and how to file a claim for professional indemnity insurance coverage. If a client or customer complains about something that can’t be easily fixed, you should usually tell your insurance company. In some cases, you may need a refund or changes to the service. But if the customer is still unhappy, your backup might be able to help.
To file a claim, you must contact your broker or insurer directly. If you require assistance, they will be your best point of contact. They may be able to offer suggestions on how to resolve the issue, or they can guide your next steps. You should also review your corporate insurance policy in Singapore to ensure that you are covered.
You can fill out a claim form that provides your insurer with all the necessary information to begin processing your claim. They may request evidence, such as emails between you and the client, to demonstrate the nature of the problem and the basis for your PI insurance claim. After completing the form, your WICA insurance provider will update you at every stage of the claim process, providing you with updates and relevant information.
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