Running a business that provides professional services or advice comes with its share of risks. Even with the best intentions and practices in place mistakes can happen, and when they do, the consequences can be costly. This is why Professional Indemnity (PI) cover is necessary.
Professional Indemnity insurance responds to claims of negligence, breach of duty, errors or omissions which result in a financial loss. If legally liable your business would be responsible to pay compensation to a third party plus the costs of defending a claim. These costs can be financially crippling, whether or not the claim was justified.
In New Zealand, PI cover is not just a safety net, it’s often a contractual requirement. Many clients, particularly large companies or government agencies, will not engage your services unless you have adequate PI insurance in place. This is because they want assurance that if something goes wrong, your business has the means to rectify the situation.
Professional Indemnity cover is crucial for protecting your business against potential risks, meeting client expectations, and maintaining a strong, trustworthy reputation in the market. If you are unsure if your business requires Professional Indemnity cover, speak to your insurance broker.