Several cases of professional negligence made it to the headlines so far this year, many of which concerned third-party claims. While errors in professional practice are not avoidable altogether, not all such claims are a result of negligence, with trailing disrepute and significant financial losses.
Therefore, the importance of a professional liability insurance plan cannot be stressed enough. A professional liability or indemnity insurance cover is thus crucial to professionals in specific areas of expertise like architecture, medicine and law.
Medical professionals can also benefit from an affordable professional loan for doctors besides buying a liability insurance plan from a suitable lender for widespread financial health.
Thus discussed are the key factors one should keep in mind before purchasing a professional indemnity insurance cover. But before that, it is important to understand what this insurance plan comprises and the benefits so covered.
What is a professional liability insurance cover?
A professional indemnity insurance cover is a policy tailored to provide financial protection to professionals like doctors, engineers, chartered accountants, etc. against claims of negligence or malpractice made by their clients or third-party.
Professionals like doctors should thus invest in an ideal medical malpractice insurance cover to protect themselves against such claims.
How does a professional indemnity insurance plan work?
Professional liability insurance (PLI) plans are of different types based on the individual’s profession. While these are termed as medical malpractice insurance policies for doctors, engineers and chartered accountants can opt for errors and omissions insurance plans.
PLI plans are usually arranged based on the claims made during the policy period. It means that the insurance policy covers or protects the policyholder against only those claims that are made during the policy period.
In today’s world, any professional who offers advisory services can be sued; in which case the cost incurred can be exorbitant. Hence, one should consider investing in a professional liability insurance plan that covers the insured against any loss arising due to claims made during the policy period.
Crucial things to remember when buying professional indemnity insurance cover
- Find a reputed financial aggregator
Professionals must look for a reliable financial institution that is capable of providing support with claims and offers coverage to the risks prevalent in their field of practice and expertise.
For example, a doctor should buy a professional liability insurance policy from an aggregator that can offer coverage to a range of claims such as treatment negligence or risks associated with working with victims of trauma.
- Analyse the cost
Individuals should realistically assess the amount of premium that they will be comfortable paying. Besides that, they should also analyse the associated professional risks likely to occur, contracts, and legal requirements before deciding on the cost.
Doing so will help professionals purchase a liability insurance policy that keeps premiums at an affordable and reasonable limit.
- Find the extent of professional liability insurance coverage
Employer-based insurance policies pertain to the organisation on the whole and then cover the individual employee as an extension. One should carefully analyse the type of risks covered under such policies.
If it doesn’t cover a professional against severe allegations and claims, it is ideal to invest in professional liability insurance separately.
- Choose the suitable coverage benefits
While looking for an insurance policy, care should be taken regarding the type. Professional liability insurance policies are of two types broadly – occurrence and claims-made policy. In case of the former, the claim can be reported any time even if the policy is not in effect during the time of reporting.
On the other hand, a claims-made policy provides cover only if the alleged malpractice or incident happens and is reported during the policy period.
- Understand what the policy does not cover
Individuals are also encouraged to enquire the financial aggregators about what their policies do not cover. It is crucial to know such information in advance rather than being in a fix later. Plus, being aware of the types of insurance policies in India is an added benefit.
These are some of the key factors to keep in mind when looking for an ideal indemnity insurance policy. Professionals should also try to expand their business to improve their financial outlook. They can further apply for a loan for professionals with lenders such as Bajaj Finserv for practice expansion and improvement.
The lender also brings pre-approved offers on credit products such as business loans and personal loans. This makes the process financing hassle-free and helps save time. One can check the pre-approved offer on the lender’s official website with essential contact details.
Professionals like doctors, architects and lawyers are always subject to risks for the services rendered. To avoid such circumstances, they should consider buying professional liability insurance plans that offer all-inclusive coverage to the prevalent risks of defamation and other serious claims. They should also be aware of the risks if they don’t have professional indemnity insurance.