Professional indemnity insurance often isn’t at the top of the priority list for most tradies when it comes to insurance cover and it’s easy to write it off as cover that just doesn’t apply to you. However, many tradies require the protection of professional indemnity insurance and you may need to consider this policy if you provide professional advice as part of your job. Today, we’ll be looking at exactly what professional indemnity insurance is and how much it’s likely to cost.
What is professional indemnity insurance?
Professional indemnity insurance protects your business against third party claims for financial loss following an act, error, omission or breach of duty. It can cover the costs associated with damages, as well as the legal costs of defending a claim. While professional indemnity insurance has traditionally been reserved for professions such as lawyers, doctors and accountants, there is an increasing need for tradies to consider this cover if you provide advice as part of your work. Indemnity insurance is particularly relevant for tradies who work in the building or construction industry. In some instances, your contract will specify that you need to have professional indemnity insurance in place.
How do I choose professional indemnity insurance?
When it comes to choosing professional indemnity insurance, you need to get the balance right between choosing a policy which offers the right amount of cover but also fits within your budget. A policy may look appealing due to a low premium but you may find that the exclusions mean that it doesn’t offer adequate protection and leave you exposed when it comes to a claim. To find the best professional indemnity insurance, you need to consider factors such as the limits of liability, exclusions attached to the policy, the length of any cooling off period, and additional cover options. It’s best to speak with your insurance broker so they can advise as to best cover for your business requirements.
How much does professional indemnity insurance cost?
The cost of your professional indemnity insurance will depend on a number of factors and premiums will differ depending on your situation. Some of the factors which impact on the cost of your indemnity insurance include:
- The size of your business
- The type of work you carry out
- The annual turnover of your business
- The industry you work in
- The amount of cover you require
The higher your risk of a professional indemnity claim, the more you can expect to pay in premiums. There are also certain industries which cost more to insure and you may also be required to have more indemnity insurance if you take on contracts with larger clients.
All Trades Cover specialise in providing insurance cover for Australian tradies. For a professional indemnity insurance quote, contact All Trades Cover today on 1300 826 850.