Information is the new currency. As our culture shifts from the cult of the individual to a more cooperative model of interdependency, specialization has become the rule, changing the definition of just who is a professional. These days a professional is no longer merely a physician, a solicitor or an accountant, but anyone who is in a position to offer paid advice.

The possibility that mistaken advice may be given and acted upon, or that correct advice may be misinterpreted, is what fuels the professional indemnity industry. For professionals who get paid for offering specialized advice, indemnity insurance offers a protection from the consequences of advice that can be interpreted at best as negligent, at worst as a breach of professional conduct. Professional indemnity insurance protects small businesses whose product is owner expertise from liability related to the services they offer.

As professionals with different areas of expertise incur varying degrees of liability, not all professional indemnity covers are alike. Here’s a look at some professional indemnity packages designed to address the needs of specific occupations.

Medical Malpractice Insurance

In Australia, physicians working in a private practice, either one that they own or one where they have privileges, are required by law to carry a certain minimum amount of medical indemnity insurance. This is seen as a protection both for physicians and patients.

While physicians who work in public hospitals are already covered by the hospital’s indemnity cover, the coverage is only for a small amount and it’s advisable to carry additional insurance. Malpractice indemnity is also available for allied health professionals such as pharmacists and nurses.

Medical indemnity includes cover for civil liabilities arising from breach of duty related to patient confidentiality, unintentional defamation and loss or destruction of medical information as well as instances of dishonest or malicious behavior or breach of fiduciary duty, secondary to the Corporations Act of 2001.

Legal Indemnity Insurance

Legal indemnity insurance protects members of the legal profession against civil liability claims. Often these claims involve allegations of professional negligence.

By law, solicitors and barristers are both required to carry professional indemnity insurance. Solicitors are actually required to participate in two types of professional indemnity cover: a professional indemnity insurance policy that’s been approved by the Attorney General; and mandated contributions to a Fidelity Fund, established to compensate individuals who suffered financial loss or damage at the hands of a dishonest legal practitioner.

How much professional indemnity insurance should a legal practitioner carry? By law, legal firms must carry a minimum of AU $1,500,000. Most firms would be well advised to carry more. The factors that determine how much a legal firm should carry include the firm’s jurisdiction, the firm’s size, its legal focus and its revenues. The higher the profits of a legal firm, the more professional indemnity insurance it should carry.

Professional Indemnity Insurance For Real Estate Agents

Real estate transactions grow more complex every day. Disputes, once settled amicably, frequently end up in court these days. Real estate professionals are particularly vulnerable because of the high valuation of the transactions they handle and because they often have access to unoccupied premises.

Real estate indemnity cover provides what is known as errors and omissions (E&O) protection for real estate agents, real estate brokers, appraisers, home inspectors and mortgage brokers. This protects real estate professionals when clients claim contract breaches.

Indemnity Insurance For Architects, Designers and Civil Engineers

A miscalculation on the part of an architect during the design stage can have devastating consequences during the construction phase of a building project, which is why architects and related professions are typically protected by E&O covers. Other risks frequently incurred in the normal course of an architect’s work? Botched feasibility studies, inability to specify and /or obtain the right building materials, failure to obtain the right permits and licenses in a timely fashion and situations of that nature.

Educators’ Professional Indemnity Insurance

From allegations of discriminatory admissions processes to claims that teachers and administrators aren’t working hard enough to make a school a safe environment, educators are finding themselves liable –both for things they do and things they don’t do — more than ever before. While teachers and administrators may already be covered by the institutional indemnity cover, it’s prudent to carry additional coverage to protect oneself from the risk of personal and financial liability.

Indemnity Insurance For Psychologists

Psychologists face many of the same indemnity risks that physicians face, but they are viewed as easier targets by vindictive and oft times psychologically disturbed clients, out to seek revenge. In a recent case, a psychologist who reported an abusive parent to the police in accordance with professional standards, was then sued by that parent for defamation. The psychologist won the court battle, but it was a Pyrrhic victory: Her legal costs were so overwhelming, she almost lost her business.

Conclusion

Maintaining an adequate amount of indemnity cover is one of the most important ways a professional can protect his or her solo practice. After all, unfounded allegations still must be fought in court, and the costs of maintaining a defense can easily undermine a small business’s finances. Business experts and professional organizations agree that professional indemnity insurance is an absolute necessity for any professional seeking to go into business.

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