Professional Indemnity Insurance

By: EconomyWatch   Date: 26 May 2010

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Professional indemnity insurance protects you from claims of your clients, customers or business associates, arising out of their dissatisfaction from your service, which might be a result of professional advice, your action or the lack of it. A claim from an unhappy client is not only damaging to one’s reputation, it can cost you a fortune. Professional indemnity insurance protects your business from both. When choosing professional indemnity insurance, it is important to consult an experienced and reliable broker, who can help you decide the amount of coverage that will be best for your company. The premiums charged by insurance companies depend on the nature of your business and the company’s own experience in the sector. The risk factor of committing an error in your business is also of utmost importance.

What does Professional Indemnity Insurance give you a cover for?

  • Negligence or breach of duty: indemnifies the insured against any claims arising out of neglect, omission or error committed during the term of the policy.


  • Intellectual property: an infringement of another’s copyright, trademark or broadcasting rights and the damage caused thereby is given cash cover by your insurance company.


  • Civil liability: indemnifies you in a very broader sense, covering accusations of breach of contract, slander or libel.


  • Loss of documents, data: a client can sue you for lost, stolen or missing data. Getting insurance cover means that you do not have to pay for the damages.


  • Malicious falsehood or dishonesty: liability arising out of a fraud, dishonesty or malice committed by your company or any of your employees is given a cash cover by your insurance policy.



    • How will Professional Indemnity Insurance protect your business?

    Professional indemnity insurance gives you coverage irrespective of whether the claim is genuine or not. Depending on the cover for which your business is insured, you are given professional, legal and monetary help, even if you lose. Further, the policy takes the financial responsibility of ensuring that any damage is repaired, thereby avoiding an even larger claim by the offended party. It is also a good idea to get professional indemnity insurance because clients will be more likely to conduct business with you if you have this insurance. All the expenses, ranging from that of solicitors, advocates, witnesses as well as the court cost of the offended party (if ordered by the court), will be paid for by your insurance company.


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