Reliance Partners

Address: Level 3, 10 William Street,

Perth, Western Australia 6000

Phone: 1300 403 386

Email:

info@reliancepartners.com.au

Professional Indemnity

Insurance: What it

Protects a Professional

From

Professional indemnity insurance is a business insurance that protects firms

and individuals that offer professional advice or expertise to others.

It serves as protection against legal costs and damage claims to a third

party. The damages may arise out of an act, omission, or breach of

professional duty in the course of a business transaction.

Negligence

Professionals, especially those who provide advice or expertise to any third

party, owe a duty of care to clients. This means they need to take all

reasonably practical steps to prevent any errors or omissions that may cause

harm to the clients.

Negligence can happen when a professional:

- Owes a duty of care to the plaintiff; - The duty of care was breached;

- The breach caused loss or damages to the plaintiff.

A professional can be negligent if the

plaintiff incurred damages or losses as a

result of the professional’s negligent act,

error, or omission.

Loss of Documents or Data

Professionals who lose a client’s documents

or important paperwork can be slapped

with a professional indemnity claim. The

recordkeeping is still considered a part of

their duty, and when this is not followed,

they may be liable.

Libel and Defamation

Professionals who make defamatory, derogatory, or malicious claims about a

competitor can also be slapped with an indemnity claim. This is because as

professionals, one is expected to abide by certain codes of conduct and

professionalism.

Slanderous, defamatory, or libellous statements made are unbecoming of a

professional.

Breach of Confidence

Lawyers, doctors, and other professionals follow a confidentiality agreement

with their clients. This means any communication between the client and the

professional is privileged and cannot be disseminated without proper consent

from the concerned parties.

Professional indemnity insurance provides

coverage for infringement of design or

disclosure of privileged information.

All insurance policies carry exclusions and

can be customised depending on one’s

profession or industry. Legal advice, as

well as consultations with insurance

providers, is still the recommended option

to find a suitable indemnity insurance

coverage.

Resources:

http://reliancepartners.com.au/product/professional-indemnity/

http://injury.findlaw.com/product-liability/legal-basis-for-liability-in-product-

cases.html

http://ausdance.org.au/articles/details/why-is-public-liability-insurance-a-

must-have-for-dance-teachers-and-studio

http://www.contractorweekly.com/contractor-insurance/professions-that-

require-pi-insurance