PROFESSIONAL INDEMNITY COVER IS VITAL FOR A SUSTAINABLE BUSINESS

PROFESSIONAL INDEMNITY COVER IS VITAL FOR A SUSTAINABLE BUSINESS
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By Joseph Kamiri

The nature of the workplace is such that people seek to carry out their duties professionally by upholding the organization’s code of conduct and values. While the intention of a professional might be good, there are challenges that can arise due to negligence or errors and omissions exposing him or her to situations that may result in legal consequences. Since such circumstances are not fully predictable, it is important for professionals to take an insurance cover that mitigates this risk. The intent then will be to prevent financial or operational losses in case of lawsuits that maybe filed against them.

Locally, while some entities require that their staff have a professional indemnity cover, some do not. However, it is advisable that professionals exposed to this legal risk take up an insurance cover as a measure to cushion the business in the short and long term.

Among the people who need this insurance protection are architects, lawyers, engineers, accountants and medical practitioners. These are professionals whose daily operations make them vulnerable to client dissatisfaction, which is difficult to resolve.

Other characteristics include practitioners who have gone through specialized training in a particular field with defined qualification to practise work and educated professionals whose service is at a fee. In addition, the specialists are regulated by a governing body (for instance a professional association) or by law with clear professional standards).

In this regard, taking a professional indemnity is beneficial to the business owner, their clients and the professionals working for that entity.

The professionals

While professionals do their best to discharge duties in a professional and lawful way, sometimes, they may encounter claim suits due to malpractice while applying their   skills and expertise. Since this is not something that can be accurately forecasted, it is prudent for businesses in these fields to be prepared for any eventuality by purchasing a professional indemnity cover.

Once the cover is in place, it will empower employees to carry out their duties without fear of retaliation or monetary loss. In the event of a lawsuit, practitioners will continue working with the assurance that the insurer will cover the legal fees. This eliminates distress and can help increase productivity.

Be it lawyers, doctors, teachers, engineers or other professionals, having such a cover has proven to be important due to the benefits cited, including the protection from monetary and reputational loss.

The business

The professional indemnity cover promises a continuation of business regardless of the legal proceedings or charges that may be brought against it. In this regard, the firm is able to build trust with its suppliers and clients who are assured of consistent work delivery with minimal or no disruption. In addition, it avoids huge financial burdens often tied to legal proceedings or processes.

CIC Professional Indemnity Cover

The CIC professional indemnity product covers professionals against claims that may arise because of errors, omissions, misrepresentation or negligent advice provided in the course and scope of their services.

With cover limits of up to Kshs.10 million, professionals who meet the necessary requirements have access to a cover that builds their reputation and confidence because of being efficient and effective. The cover, which has additional extensions for occurrences such as loss of documents, dishonesty of employees, defamation, partners’ previous business and outgoing partners, can be an integral add on to the business and should be a key consideration by all professionals.

Hedge

A professional indemnity cover might have limits on what it can cover, but it provides a hedge against key legal and financial risks. For that reason, be it  for a business or individual, this cover is necessary for reputation management and business continuity.

The writer is the General Manager – Marketing and Customer Experience – CIC Group

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