Company Indemnity Insurance

In the last ten years, there has been a increase in the number of people searching for “company indemnity insurance‘ on the Internet. Many small business owners may type in ’employers indemnity insurance’ or ‘business indemnity insurance’. However, technically speaking, insurance brokers and insurers, generally refer to this type of insurance as ‘professional indemnity insurance’. It is sometimes known as errors and omissions insurance. In principle, it is designed to compensate companies against the cost of litigation, as well as the financial outcomes of litigation. For the millions of self-employed or small business owners in the United Kingdom, the threat of legal disputes is very real. Companies of all sizes are facing increasing instances of litigation from disgruntled third parties. Some sections of the UK legal profession has aggressively advertised ‘no win no fee’ legal services. As a result, many more consumers and businesses have been encouraged to take legal action against companies.

Company Indemnity Insurance- what will it protect

A professional indemnity insurance policy can protect one or more employees of a company, against different types of legal action. So, if you are thinking of starting up a small company, it is likely you will need to address the insurance needs of the business. An indemnity policy is most relevant if you are starting a new company will be providing any type of advice, expert opinion or professional conclusions. An indemnity policy will pay out in two main areas. First, to settle a compensation claim awarded against your company. There are many types of claims against professionals, such as professional negligence, or liable and slander, infringement of intellectual property, liability for loss of documents or dishonesty. The second area is to pay for the legal costs in the course of defending an action against you.

It is important to remember that there has been a huge increase in the level of advertising by legal companies in the area of Claims Management. To add fuel to the fire, there has also been a big increase by newspapers, regarding disputes between companies, that ended in litigation. The headline grabbing article usually focuses on settlements and compensation payouts between companies, (that to the ordinary person in the street, appear to be out of the ordinary or completely outrageous).

Yet, sometimes it’s difficult to separate the perception from reality. The perception is created that an enterprise could be sued, at any time, for anything. However, in reality the likelihood of being sued is probably not as bad most business people think. It is true that the cost of litigation can be huge. However, many people who might have a grievance and want compensation, do not always want to go through a long, legal process. The stress and hassle of court proceedings are usually a last resort for all concerned. Here indemnity polices are very useful to pay for the solicitors fees to settle a dispute in or out of court. It should be remembered though that a professional indemnity policy is designed to protect the policyholder. It is up to the claimant or their advisors to prove negligence against the policy holder.

There are many types of company indemnity insurance policy, that are tailored to the nature of various trade or occupation. Underwriters have long experience of claims related to the broad range of professional occupations. This is why they will want to know as much detail about your commercial organisation during the quote application process. For instance, they will want to know the number employees you have, what they do and in which markets your company operates in.

Beware that cover levels, and the types of cover can be very different between different policy providers. For example, the construction sectors have a range of professional advisers working within them, whose skill sets are very different from professionals working in the telecoms and IT sectors. So whether your company focuses on structural engineering, architecture and design, environmental assessment or property investment – it is likely will find a range of comprehensive professional indemnity policies, tailor-made to your particular sector. You should check the policy wording and see what exclusions exist. You may find that a client decides to take up a claim for compensation against you, years after the work was undertaken. So check to see any limits of retroactivity or exclusions based on specific historical scenarios. Although the Policy Wording may appear generic in nature, each insurance company may treat risks slightly differently.

Although most levels of cover are fairly standard, certain types of professional advisers may need additional levels of cover. There may be a trade-off between the premium and the comprehensiveness of the policy. Other factors that affect price may include, previous claims, track record and experience of the company, and the geographic markets in which it operates.

If you like a company indemnity insurance quote, please give us a call or fill out our online quote request form above.

Here is a sample list of occupations we can provide insurance cover for:-