Why you need professional indemnity insurance
As a solicitor in Australia, you have a professional responsibility to provide expert advice and services to your clients. However, despite your best efforts, mistakes can happen. When they do, your clients may hold you responsible and seek compensation for any financial loss or damage they have suffered as a result of your advice or services.
This is where professional indemnity insurance comes in. Professional indemnity insurance is a type of insurance that provides protection to professionals, such as solicitors, in the event that a client makes a claim against them for negligence or breach of professional duty.
Professional indemnity insurance is especially important for solicitors in Australia, as it is a requirement of their professional regulatory body in their jurisdiction, overseen by the Legal Services Council. This means that all solicitors in Australia are required to hold professional indemnity insurance to be able to practice law.
In addition to being a regulatory requirement, professional indemnity insurance is also essential for protecting your practice and your personal assets. If a client makes a claim against you and you don’t have adequate insurance, you could be liable for paying any damages or compensation out of your own pocket, which could be financially devastating. Choosing the best professional indemnity insurance gives you the peace of mind that you are protected in the event of a claim.
Another important aspect of professional indemnity insurance is that it covers not only claims that are made against you during the policy period, but also claims that may arise from work you have done in the past. This is known as retroactive cover, and it is an important feature of professional indemnity insurance for solicitors, as claims can sometimes take years to materialise.
It is also possible for a claim to arise after you have ceased practising law or retired, perhaps several years later. It is crucial to have suitable cover for this period too, otherwise you could again be personally liable. This type of cover is known as run-off cover, and is included in our standard professional indemnity insurance coverage.
ABC insurance provides A Better Choice for Australian solicitors.