The right indemnity protection can make the difference between staying in business and losing it when a client claims damages against your business. To ensure that you purchase the correct indemnity protection, you need to follow a few steps and ask a number of questions. They include purchasing the right type of indemnity insurance for your particular profession and making sure you buy enough of it. You should also get the indemnity protection from a strong, trusted insurance company, as well as know exactly what the insurance policy does, and doesn't cover.
Indemnity insurance is geared toward certain professions. These can include accounting, law, medicine and others. For some of these professionals, indemnity protection may be mandatory depending on the state or country in which the business is operating. Whether or not an indemnity policy is required by law, a professional purchasing the coverage will want to be certain to buy a policy customized for his or her particular business.
Another factor to consider when buying indemnity insurance is the size, or limits, of your coverage. The more coverage you buy, the more the insurance will cost. A business owner or professional, however, should also consider the size of the projects he or she works on. The larger the projects, the more money you could be liable for following a court case or settlement and the more insurance you'll need to help cover the costs. For some types of work, such as a government project, the contract might also require a minimum level of insurance.
When it comes to the price of your indemnity protection, the lowest priced insurance policy could also be the wrong one if you consider the strength of the insurance company. In many instances, the insurance carrier that is willing to give you the least expensive policy may also be the weakest financially. It might not have the money to pay a claim if you make one. Consider the financial rating, along with the price, of any insurance company that you plan to purchase indemnity insurance from.
When choosing your indemnity protection, be sure to read the actual policy or have it analyzed by your insurance broker or agent. The key here is to watch for exclusions in the insurance. In indemnity protection policies, the insurance company might not cover business done across international borders or work started before the start date of the insurance. You might be able to negotiate the removal of these exclusions or find another policy.
