Professional indemnity insurance supports you in paying the compensation to a third party, who may have suffered injury, loss or damage through any breach of duty, causing a quantifiable financial loss. Professional indemnity insurance, commonly known as pi insurance, is a financial instrument that indemnifies professionals against any legal liabilities, such as injury, loss or damage caused due to their professional negligence.
Broadly, there are three types of Professional indemnity insurance, namely breach of duty, civil liability, and negligent act, error or omission.
Negligent act, error or omission- is the narrowest form of cover that indemnifies the pi insurance holder against loss incurred only due to their negligent act, error or omission in carrying out the business of the policyholder. Breach of duty is a typical pi insurance that provides indemnity to the insured against the loss arising from any claim for breach of duty made to the insurers during the policy period. Civil liability is another form of Professional indemnity insurance that provides indemnity for any kind of civil liability. This includes breach of contract, libel, and slander
Professional indemnity insurance actually covers many aspects. The followings are the detailed list of the same.
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Usually the duration of the policy is one year.
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Premiums represent a particular part of a firm’s running costs
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Professional indemnity insurance only covers the firm, not the interests of their client or any third parties.
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PI insurance is written on a ‘claims made’ basis.
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The policy pays only after the liability of the claimant is established.
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In the event of a claim being made, the policy also covers the cost of legal defense
PI insurance saves the policyholder against any unfortunate situation of facing a legal action or claim arising out of the services he has provided as consultation. It is necessary to build up an understanding of your needs and risks before looking for professional indemnity insurance cover. Professional indemnity insurance is a powerful tool that saves you against any sort of uncertainties in your business that ends up with financial compensations. Understand your business needs and requirements and adopt Professional indemnity insurance coverage to deal with financial uncertainties.
