Category: Professional Indemnity

Finance Protection For Finance Professionals

Professionals in the field of finance are experts when it comes to numbers. Accuracy in the work is an indispensable attribute that clients expect and depend on. Integrity is another thing that clients expect, since they are entrusting their finances in the hands of a professional. Accurate and honest work builds goodwill, which needs to be protected at all costs since it is the foundation of a successful business.

However, it is not uncommon for even highly qualified and experienced professionals to make mistakes sometimes. Even after the numbers have been double-checked, there are times when errors may go unnoticed. In such cases, clients may file claims of negligence, which may damage the individual professional or the firm’s reputation as well as finances. So, while maintaining client’s financial health, finance professionals also need to protect their own finances. This can be done with a professional indemnity insurance (PII) coverage.

 

Who needs PII and what protection does it offer?

 

Finance professionals like accountants, tax preparers, bookkeepers, and small and mid-sized accounting firms need to get coverage against liabilities that arise due to errors and omission committed by them while performing their professional duties. Malpractice lawsuits are very costly and may prove too expensive for individual professionals or small firms, maybe even leading them to bankruptcy and debt.  Getting PII is the primary way in which to protect your practice against any malpractice suits. Also, having PII coverage is often a prerequisite for clients considering employing a professional service. Some professional associations also require individuals or firms to have PII coverage as a condition for membership.

 

Professional indemnity insurance will cover the cost of the lawsuit and pay for any settlements that need to be made. Even minuscule errors or omissions in financial work can lead to heavy losses for clients, so it is understandable that they will want to shift the burden of that loss to the finance professionals responsible for those mistakes, even though they were made unintentionally. Some of the types of mistakes that can be covered by PII are:

  • Delivering service that is unsatisfactory or subpar in quality to what was assured, like forgetting to file a client’s tax form in time,
  • Negligence, such as failure to include certain information that should have been included,
  • Any advice given that causes financial loss for a client, and
  • Any errors or omissions.

 

Even when a claim may be wrongly brought against a professional, a PII will cover any costs that occur in the process of investigation and legal expenses.

What Is Personal Insurance?

Personal insurance is a type of insurance cover that protects the life and property of an individual or person against the risk of loss, harm or damage due to natural and/or unforeseen events or contingent reasons. The insurer or the insurance company undertakes the responsibility or liability to compensate or indemnify the insured party for the loss and damage caused to his life or his property and personal belongings due to various reasons that will be covered in the insurance policy. The insured party pays the insurer or the insurance company a certain sum of money, called the premium amount, for a certain period of time as per the terms and conditions of the personal insurance contract.

Some of the common types of personal insurance are:

  • Life insurance
  • Motor insurance
  • Accident and health insurance
  • Home insurance
  • Travel insurance

What is life insurance?

Life insurance is the most common and important type of personal insurance available today. It is the protection given to the life of a person and compensates or indemnifies the relatives and dependents of the insured party on the death of the insured. The value of a person cannot be determined in monetary terms so there are various types of insurance policies available and the amount of premium payable depends on upon the party who is getting insured. He can assess his net worth himself and determine a suitable premium amount for himself and can pay the same to the insurance company.

What are the advantages of life insurance?

  1. Risk cover – life is full of uncertainties and unforeseen circumstances so life insurance ensures that your loved ones will be well taken care of even after your demise.
  2. You can plan each stage of your life – life insurance not only insures your life but provides financial support in each and every stage of your life, like your children’s education, marriage, building a home, retirement, etc.
  3. Covers health-related expenses – some life insurance policies provide health and medical insurance cover along with them and pay for hospitalisation bills, medicines and expensive lab tests and scans for treating critical ailments and diseases.
  4. Induces the habit of saving – a life insurance policy will inculcate the habit of saving for you, especially if you are a spendthrift. Any insurance policy will require you to pay a certain amount of money periodically towards the policy as premium and this acts as long term savings in the bank.
  5. Assured income during retirement – life insurance helps in retirement planning and provides a steady source of income during your years of retirement when you are not able to work and earn an income.

Allegiance is an insurance company in Singapore that deals with various kinds of personal insurance as well as professional indemnity insurance in Singapore.