Perhaps the biggest downside to acquiring indemnity insurance, is that it sometimes provides a false sense of security. Since it provides financial backing during legal proceedings, and it also helps to handle compensation to clients, some people become sloppy with client interactions. While it is a useful tool to combat claims made against a person, indemnity insurance should not be viewed as a license to become care free in dealings with clients. In fact, such action can be quite detrimental to the future success of your business. Let’s take a look at some ways that you can prevent clients from causing harm to your business through claims.
One of the best ways to prevent claims made by clients is to clearly articulate the expectations of all parties. This means that you and your client should go into specifics about what is expected, including payment plans and ethical work practices. If your service requires confidentiality, then make sure that everyone is aware of this fact. It is always a good idea to have a confidentiality clause that all parties can sign. Even though indemnity insurance can help you in breach of contract situations, it is best to avoid such costly issues altogether.
Whenever you enter into a client-business relationship, it is important to have contracts which do not pose questions. Foggy areas or areas which are left open to interpretation often become grounds for claims made by clients. A client’s lawyer will often harp on loop holes found in these contracts. The best thing to do is to allow a lawyer to review a contract, especially if it is a standard contract that you plan to use with multiple clients over time. Allow them to point out any areas of confusion, so that you can amend the contract, if necessary.
Record keeping is another important aspect of helping you to fight claims, while allowing indemnity insurance to serve you in emergency situations. Detailed records should include every aspect of the client and professional relationship. This is especially true for financial terms that might become disputed during court proceedings. Some professionals become lulled into a false sense of security when they work with the same clients for many years. however, it is highly important to keep records of all transgressions to protect yourself.
While professional indemnity insurance quote provides financial backing for people who need it, it does not provide you with a lawyer. You must be ready to employ a lawyer’s services as soon as a situation arises. If you wait until a situation occurs before seeking a lawyer’s services, then you will not have enough time to prepare. Part of your responsibility as a professional is having the ability to settle a dispute as quickly as possible. Long, drawn out issues only serve to smear the reputation of your company.Comments Off