Take out professional indemnity insurance cover if starting up a new business

Industry experts have recently stated the importance of securing professional indemnity insurance cover for those who start up their own business that involve providing professional services to their clients.

This specialised professional liability insurance covers business owners in the event of a claim being filed against them due to defamation, dishonesty, negligence, client data damage or loss, and any intellectual property disputes.

Such business liability insurance is compulsory in some professions, such as many contracted worker positions.  In order to provide peace of mind to business owners, many decide to take out the cover if they are providing advice to a third party.

Industry experts recommend becoming well versed with several different subjects before making a purchase of professional indemnity insurance.

One such recommendation is to select an appropriate level of cover.  Many industry insiders feel that businesses should purchase as much insurance cover as they can afford reasonably.

Many business owners have sleepless nights as they fret over whether any work they may have done in the past might become the subject of a claim against them.  As a result many insurance policies have a retroactive clause, which will cover businesses from the date the business was founded.

Additionally many insurers will only cover a specific profession or trade, such as engineers, accountants, and consultants. If a business is initially not accepted through the use of a standard application procedures, leading insurers may still provide a hand-tailored policy instead.

Finally, as the majority of business insurance policies run not on an ‘occurrence’ basis but on a ‘claims made’ one, businesses could all too easily end up liable for claims through past clients well after the expiration date. In the event of such an eventuality, securing run-off cover will protect the business from financial ruin.

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