How to Avoid a Professional Negligence Insurance Claim
In part two of this series on Professional Negligence we talk about how to avoid an insurance claim.
In this post you will learn:
- How to avoid a professional negligence insurance claim.
- How to protect your business with insurance.
Let us start by talking about what Professional Negligence is.
Defining Professional Negligence
Professional Negligence is the act of a professional not doing their job up to a reasonable standard.
For this to occur, the person hired for the job must perform below the standards of a reasonable person in a similar role.
Now that we have this covered, it is time to talk about how to protect your business.
How to Avoid a Professional Negligence Claim
“Duty to Mitigate” is an important element of a professional negligence claim and a term that is good to become familiar with.
It refers to a situation when a person suffers damages as a result of a breach of contract. In that case, he or she has the legal obligation to minimize the effects and losses resulting from the injury. The duty to mitigate works to deny recovery of any part of damages that could have been reasonably avoided.
Duty to mitigate is the steps a client should take to reduce losses or harm arising from negligence.
Using the “duty to mitigate” argument is not enough to dismiss a professional negligence claim.
Here are some strategies you can apply to avoid a professional negligence insurance claim.
Require Detailed Contracts
Whether you are working with new or existing clients, you need to have detailed contracts in place.
Here are the basics that should be in a contract:
- The expectations of each party.
- The expected outcome of the relationship.
Having a contract to prove if each party followed the requirements is important and provides a framework of security and legality that is necessary.
Clients are more accepting of change when they are aware of the change before it happens. Leaving a client out of the loop for changes will upset them.
Remember to talk to clients regularly, communicating keeps them happy and assures them you are acting with reasonable care.
Keep Records Up to Date
A professional negligence claim often begins when two parties cannot agree.
To avoid disagreements, keep updated records of everything agreed on between parties.
If you and a client agree, make sure it is over or confirmed by email. This way there is a record you can come back to.
How to Protect Your Organization with Insurance
No matter what the outcome of a professional negligence claim is, there will be some damage to your organization. Damages could be:
- Loss of time.
- Reputation damages.
Faced with this scenario, professional liability insurance is the best policy to protect your organization from a professional negligence claim.
These are claims-made policies, so you need to make sure they are current. For claims-made policies, there is only coverage if the event occurs during the active dates of the policy.
Does Professional Liability Insurance Cover Employee Negligence?
Any professional liability insurance policy covers you, your employees, your business, and independent contractors working for you.
Make sure you meet these requirements and you will have your protection system assured.