As a professional, it is important to have the right insurance in place to protect yourself and your business. Professional Indemnity insurance provides financial protection in the event of legal action or claims made against you (or your business) for professional negligence or errors made in the course of your work.
However, there may come a time when you decide to cancel your Professional Indemnity insurance policy. This could be due to a change in your business or personal circumstances, or because you no longer feel that the coverage is necessary.
If you decide to cancel your policy, it is important to understand the process, and the potential consequences for you and your business.
You Will Not Be Covered for Claims Made in the Course of Your Work
Professional Indemnity policies are written on a ‘Claims Made’ basis, which means that once your policy is cancelled, you will no longer have the protection of the insurance. This means that you will not be covered for claims made against you for professional negligence or errors made in the course of your work, even if you had a policy in place at the time that you undertook the work.
Consider the Financial Implications
Therefore, it is important to consider the potential financial implications of cancelling your Professional Indemnity insurance. If you are sued for professional negligence or errors made in the course of your work, the costs of legal action and any damages awarded can be significant. Without this type of insurance, you could be responsible for paying these costs out of your own pocket.
Short-Term Gain, Long-Term Pain
While cancelling your policy may save you money in the short-term, it could leave you vulnerable to financial losses in the event of legal action or claims made against you for professional negligence or errors.
It is important to carefully consider your insurance needs and the potential risks to your business before making a decision about cancelling your policy.