A professional indemnity insurance certificate can also be used to show to clients and potential customers to offer them peace of mind that, should they need to make a claim against the services offered down the line, adequate financial provision has been made to meet such a claim. Professional indemnity insurance may be required even after a business ceases trading or is merged with another organisation.
For professional people who move into another area of business or who simply retire, claims against them further down the line remain a very real possibility. Therefore, so-called 'run off' cover is available which is designed to offer the same level of peace of mind for a professional person who is no longer offering services.
Such indemnity policies are ideally purchased when a professional ceases to trade, whatever the reason. This could be due to the closure of a limited company, for example, but also partnership dissolution is another common reason for taking out a run off policy. In some cases, several years worth of cover can be purchased in a single go, without the need to renew, under a single policy.
For more information about run off insurance, please read our Guide to Run Off Insurance. This guidance note is intended for information purposes only. It is not and does not purport to be legal or accountancy advice. Whilst all care has been taken to ensure the accuracy of the guidance note it is not to be regarded as a substitute for specific advice.
This guidance note shall not be reproduced in any form without our prior permission. Home News. Professional Indemnity Insurance Explained. What is professional indemnity insurance? How much does it cost? Where can I buy professional indemnity insurance? How is the premium calculated? What does the policy cover? Why is it important to businesses? Is professional indemnity insurance required by law?
How does it work? How much cover is required? Who needs professional indemnity insurance? When is it needed? What is run-off cover? What isn't covered by professional indemnity insurance? Glossary of some important terms What is professional indemnity insurance? How much does professional indemnity insurance cost? Where do I buy professional indemnity insurance?
What does professional indemnity insurance cover? How important is professional indemnity insurance in business? The amount of cover you need — and the price of your premium — will depend on your occupation. Some professional bodies and regulators insist that their members are insured for a minimum amount.
If you are not a member of a professional body you can ask your clients how much cover they expect you to have. For more information on business insurance see the ABI guide to insurance for small businesses pdf kB. You do not have JavaScript enabled. It is more commonly found with public liability and employer's liability policies. Run off cover insures against claims of professional negligence brought against you after your business has ceased trading.
This could be, for example, if you have sold your business or closed it down. It is particularly important for retired business owners to consider; without run off cover in place, they would have to fund the defence of the claim out of their own back pocket. Insurance FAQs. Insurance guides. COVID help and guidance. Legal tips. Marketing tips. Risk tips and how to prevent claims. Insurance FAQs. Insurance guides. COVID help and guidance. Legal tips. Marketing tips. Risk tips and how to prevent claims.
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