Running a business has its own pros and cons. If you are on a smooth ride, you would be enjoying being a ‘free bird’ or ‘your own boss’ feeling, but it’s in the harsh times (the recent economic down surge being one) that you feel you are left alone! Yes, running a business also means that you don’t have a support system (like a working professional has) to fall back on. Ok! There’s nothing much to be scared of, for PI insurance is around!
What is PI insurance?
PI insurance (abbreviation for professional indemnity insurance) is an insurance that covers the policyholder against claims of professional negligence on him or her. Typically, PI insurance provides this cover in three cases –
- Negligence act / error or omission: Indemnifies the professional from an act of negligence or error or omission committed while carrying out a job.
- Breach of duties: Indemnifies the professional from the loss due to breach of duties.
- Civil liability: This includes cover of the costs due to breach of contract, defamation and slander.
Business and PI insurance
It has been observed that PI insurance works most fitting for business professionals who offer advices to customers or work as freelance consultants. For an owner of a business (representing varied industries like accounting services, financial services, information technology, consulting, medical practice, legal practice and so on) the claim on the practicing consultant by a client can be easily resolved via the means of a fitting PI cover. In numerous counts businesses before signing in to a contract with a service provider have shown interest to know about the status of the PI cover for the employees of the organization.
The various business professionals purchasing PI insurance can be categorized broadly into two types:
- Voluntary- It includes majority of the business professionals running businesses like IT consulting, financial services and so on.
- Involuntary- It includes medical practitioners, legal practitioners and similar professionals. This type of business professionals are required to purchase the cover for their respective businesses from the State legislation or federal legislation.
Your professional career is surely under great risk, until isn’t covered by PI insurance. A simple insurance is all you need to protect your business and your life from the unexpected!
