The credibility of a business can hinge on various points, not least its capacity to provide an effective service. First-time clients have little way of knowing how believable or professional a business is likely to be, however, which is why they might ask questions about other clients, relevant qualifications, years in the business, insurance and so on. In respect of the last point, prospective clients would at the very least expect service providers to be fully insured. If this is not the case, why would a client ever risk doing business with a firm that apparently places little value in protecting itself from legal claims?
Insurance and specifically professional indemnity insurance is essential for many types of business. Professional indemnity cover, premiums for which can be acquired from services such as Constructaquote, is necessary for all professional service providers, from solicitors and accountants to surveyors and architects.
Without this vital cover, a business risks losing both money and clients. Money can be lost very easily without professional indemnity cover; in fact, legal claims can cripple or destroy an uninsured business. Professional indemnity insurance acts as a safety net for professionals, but it also provides benefits for clients.
Perhaps the easiest way to describe the benefits of professional indemnity insurance is by way of example. If an architect acts negligently by developing a building design that is inherently unsafe, the client might end up losing everything. Assuming the building is constructed before the design flaws are noticed, it may be that a section has to be knocked down and rebuilt. Perhaps the design flaws are not noticed in time, leaving part of the building to collapse in time, causing extensive damage. If the architect is uninsured, it is quite possible that any claim for compensation made by the client would run aground if the architect were to be declared bankrupt (and therefore unable to pay the damages).
If the architect in question does have professional indemnity insurance, their policy should be able to cover the losses sustained by the client in question or at least up to a certain limit defined by the policy. Whilst the good name of the architect would be tarnished, the client should still be able to recover their losses.
Therefore, professional indemnity insurance is essential for protecting both the insured and their clients. Mistakes do occur on occasions and insurance is sometimes the only barrier between failure and a total loss. In a nutshell, clients are unlikely to take seriously the credentials of any professional who chooses not to purchase professional indemnity cover.