Business
THE IMPORTANCE OF PROFESSIONAL INDEMNITY INSURANCE AND KEEPING YOUR COVER CURRENT
By Allistar Harris , professional risks at Aon South Africa
This enables a risk management strategy and your ability to practice your profession .
Even if a professional has acted in full accordance with the law and professional standards , if a claim is lodged against them , they will need to defend their position and actions in a legal process .
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No professional relishes the thought of making a mistake or being accused of being negligent in the execution of their professional duties . In fact , you may not even have made a mistake for a claim of negligence to be brought against you . However , you ’ ll still need to defend any such claims to resolution , which can be a costly affair , both financially and in time .
It is when things go awry and a claim is lodged that the real value of Professional Indemnity ( PI ) insurance and professional advice is truly appreciated .
PI insurance is designed to protect professionals such as architects , engineers , attorneys , brokers , doctors , estate agents – essentially any professional individual or practice – who takes
RACA Journal I July 2022 a fee for providing a service . PI insurance provides the insured party with indemnity in respect of legal liability arising out of the practice of their profession .
Indemnity cover will include the professional ’ s own legal costs , as well as any compensation to the claimant and / or legal costs that are up to the limit of indemnity of the policy , providing all parties with peace of mind and financial protection in the event of a claim .
PI cover is a non-negotiable for any professional operating in an increasingly litigious society and business environment . However , many professionals , particularly independent consultants , operate without cover , exposing themselves to
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