As small business insurance brokers, we at Professional Insurance Brokers Melbourne want to tell you what professional indemnity insurance is about.

Professional Indemnity Insurance is designed to protect the policyholder against legal costs and claims for damages to third parties which may come as a result of an act, omission or breach of professional duty in the course of the business.

If an error or omission occurs in the course of the business that results in a financial loss or injury to a third party or customer, that customer may take legal action against you to recover their losses. This is where professional indemnity insurance comes in. Professional indemnity insurance seeks to protect both your assets and your reputation, should this occur.

Why do you need Professional Indemnity Insurance?

Protecting yourself from a professional conduct accusation will cost you time, money and may damage your reputation, regardless of whether the claim is baseless or not. If things are not in your favor, you could be held responsible not only for your own actions, but for those of your partners, employees or even volunteers.

A professional indemnity insurance policy protects you and your business by granting cover against such claims and bearing the cost of defending the action so you can continue to conduct your business. Aside from that, both your assets and your reputation are protected.

Who benefits from my Professional Indemnity Insurance policy?

A professional indemnity insurance policy should cover not only your business, but also any principal, employee, director, partner or related entity while acting with the scope of their duties.

How much cover do I need?

There is no upside limit to the amount you can be sued for and although most claims against people for wrongful advice are relatively small, in some cases the total costs can run into many millions of dollars.

For example, a property manager may be sued by the owner of an apartment he carelessly leased to unsuitable tenants for the cost of some minor repairs. On the other hand, tenants may sue the property manager for critical injuries suffered when their balcony collapsed after the property manager had not inspected the structure for many years.

The unknown nature of potential lawsuits can result in vastly different outcomes and you should select the highest limit of cover that you feel comfortable with.

Call us at the Professional Insurance Brokers and we will be happy to help you with your small business insurance quotes, if you are in Australia, just call 1300 PROFIN and our staff will help you get a better deal for your business insurance.