Do you own a business that deals directly with consumers? If so, you are probably familiar with the many risk factors associated with such business dealings. All companies rely on the public to survive, which is why it is crucial to be prepared for the inevitable. What is inevitable? In this situation, it is lawsuits filed by consumers who believe they have been wronged in some way or another. A single personal injury lawsuit could lead to thousands if not millions in unnecessary expenses for businesses of all sizes. Below, you will discover what is covered under a professional indemnity insurance policy.
Third-Party Financial Loss
Professionals who offer advice or assist with bookkeeping are at high risk for mathematical errors. A small error could lead to a major financial loss of which the professional is responsible. Dealing with a lot of numbers should be natural for CPAs and accounting firms But, as the old saying goes “to err is human.” As the one responsible for the mistake, you will also be responsible for the financial loss. If your business is not covered under a professional indemnity insurance policy, you will be forced to cover the expenses out of pocket. If you were covered at the time the error occurred, you may not have been required to pay a single penny out of your personal account.
Loss Of Computer Data
Just about every company relies on a computer system. A company relies on the computer system for internal and external communication, data creation, sharing, and storage, invoicing, customer expansion, processing programs, documentation, and accounting. The data stored in a business computer system is extremely important. Without it, there would be no proof of any business dealings or operations. Data loss would be very costly for any kind of business. What is covered for professional indemnity insurance? Expenses related to your negligent acts, consequential loss, and mistakes of your employees.
The firm responsible for installing your computer system is responsible for it operating efficiently around the clock. It is also responsible for any data breaches, loss of data, and downtime, all of which could lead to a civil lawsuit. A professional indemnity insurance policy will help cover the expenses related to the incident.
Breach Of Confidentiality
Professional indemnity insurance will also cover expenses related to a breach of confidentiality. The coverage amount will depend on the financial loss sustained by your client. Your insurance company will investigate the claim to determine if it is legitimate or fraudulent before a payout is issued to your client.