The increase in litigation can largely be ascribed to:
Professionals, such as doctors, lawyers, accountants, and so on are particularly at risk of being sued. There are many reasons therefore:
Professional indemnity insurance should therefore form part of any professional's shield, particularly those who offer advice, consultancy, or other services to clients. Irrespective of a professional’s educational background, experience in the industry and natural skill, mistakes can still happen. If such a mistake leads to a client suffering harm or financial loss as a result thereof, they may institute legal action to recover the damages they have suffered. Without professional indemnity insurance, a professional would be solely responsible for paying any compensation awarded to the client, as well as any legal costs associated with the claim. This can have dire financial consequences, potentially resulting in sequestration.
Selecting the right professional indemnity cover is no easy task, given that professionals operate in different industries, with some industries containing more risk than others. After a professional has considered their risk appetite, they should consider factors, such as coverage limits, policy exclusions, and premium costs. Not all industries are eligible for professional indemnity insurance coverage, given the higher risk of damage or injury associated with some industries. Insurance companies therefore assess the risk associated with each industry before deciding whether to provide coverage or not.
In conclusion, while not all industries may be eligible for coverage, it is important for professionals to research and understand their insurance options to ensure they have appropriate coverage for their specific industry and circumstances. The importance of possessing professional indemnity insurance in light of increased litigation cannot be overstated.