England 16/11/2012 – Increasingly consumers are checking to see if the firms they use have professional indemnity insurance
In the UK, not every professional is required by law to have professional indemnity insurance. Solicitors, architects, insurance brokers, solicitors, and a few other trades have either to have it by law or to be able to be members of their trade bodies. However, increasingly firms that are not required by law to have it are deciding to invest in this type of insurance. They are doing this for several reasons.
The main reason is to protect themselves. In an increasingly litigious world, it makes sense for firms to protect themselves from prosecution as far as possible. Whilst indemnity insurance cannot stop a client from suing a firm, if they perceive that they have been ill-advised, it can protect them to some extent. If a client wins a claim, the compensation a firm has to pay out can run into tens of thousands of pounds. This can be enough to ruin a firm. All their hard work in building up a customer base and a good reputation can disappear with just one claim. Understandably, many firms now view indemnity insurance as essential rather than nice to have.
However, there is another reason firms are investing in this insurance and that is to attract clients.
How professional indemnity insurance increases consumer confidence
UK consumers are far more sophisticated than they once were. They are bombarded with information via consumer programs and TV shows that follow ordinary people embarking on big projects such as building a house. Consumers are well aware of what can go wrong when a professional offers them advice that later turns out to be flawed or completely wrong. They know that in this situation they could sue, but are also fully aware of how expensive and time-consuming this process can be. Therefore, when they see a company that is covered by professional indemnity insurance they are drawn to them. Consumers know that if something goes wrong the firm’s insurance policy will cover their losses and that a protracted and expensive court battle should be avoided. For firms like Hensure, which offer a range of flexible professional indemnity insurance policies, this has provided them with a much-needed area of growth.
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