Before dealing with indemnity insurance let’s just clear up our basics with a simple question – what is indemnity? Indemnity essentially, is a sum paid by a person/institution say ‘A’ to another person/institution say ‘B’, as a compensation for a particular loss suffered by B. More often, indemnity is paid when the party (A in this case) is responsible for the loss, however in some cases indemnity is provided even when the party (A) is not responsible for the loss, for example prize indemnity insurance.
Professional liability insurance is one of the most popular forms of indemnity insurance. A professional indemnity insurance or PI or professional liability insurance is a type of insurance which provides cover for professionals in case of claims (of breach of duty due to error or omission or negligence) by their clients. Liability insurance is another example, which provides cover only in case of physical damages (personal or to the properties).
Some PI service providers help the policy holder with an all-inclusive coverage plan that extends to cover civil liability with areas partaking to subjects like breach of contract, libel and slander.
So, as it can be seen, there are several points of positives that lie with regard to popularity, the success of this policy however belongs to its uncomplicated terms of deliverance. To benefit a financial relief, the policy holder just needs to prove the cost or losses incurred. Other way round, it’s only the provable loss that can be obtained by the beneficiary of the policy. It’s in contrast to life insurance policies where the death of a person (due to a reason as per the clauses of the policy) entitles the beneficiary of the entire amount of the policy.
Indemnity insurance can cover a professional and it benefits should be availed by every professional who dreams of a secured professional and personal life.
