Professional Indemnity Insurance Coverage

Risks faced by professionals

Professionals are people rendering different kinds of services.  They may be doctors, engineers, chartered accountants, architects, financial consultants, lawyers or stock brokers. They are specialists in a particular field and perform a service or render advice for a fee.

Most of them however, do not realize that they face great risk in the course of their service due to any error or omission on their part.  An untoward incident may occur and the affected party may hold the professional responsible for the loss.  Such a claim would prove to be a great burden and may even lead to financial ruin.  All the years of hard work put in may come to naught.  Professional indemnity insurance coverage protects the professional from such claims arising from third parties.
Certain professionals like doctors are considered to be in the ‘high risk’ category as the chances for lawsuits against them are higher and insurance premium rates for such people would be more expensive.

Professional Indemnity Insurance Coverage

  • Professional indemnity insurance covers any loss arising from claims for errors, omissions or professional negligence by the professional.
  • Professional indemnity insurance coverage includes any legal liability that may arise from bodily injury or death caused by the professional in the course of his duty.
  • The insured may be an establishment or a firm which has been bought or taken over from somebody else.  In such a case, if stipulated in the policy, professional indemnity insurance coverage extends to any claims made against loss caused by actions of the predecessor too.
  • The loss from an act of error, omission or neglect, even if performed by the employees of the insured in their professional capacity on behalf of the insured will also be covered.
  • Claims arising from infringement of intellectual property rights like trademarks or patents are covered by professional indemnity insurance.
  • A professional may lose data or important documents due to which the client suffers a loss.  Professional indemnity insurance coverage includes these claims too.
  • Professional indemnity insurance coverage may also include any legal fees, costs and expenses related to the claim.

Professional Indemnity Insurance Coverage Exclusions

Generally, a professional indemnity insurance policy clearly states that there are certain points which are not covered by the policy. Some of them are -

  • A criminal act by a professional which is against the law is not covered.
  • A claim arising due to an action of negligence committed willfully by the insured will not be compensated.
  • The insured professional should not have been under the influence of alcohol or drugs when committing the act.
  • A third party public liability claim is not entertained by most insurers.
  • Any fines or penalties levied on the insured professional will not be paid by the insurance company.

Online Professional Indemnity Insurance

In a technology driven world, getting information, comparing rates and even buying insurance is a simple task.  People who wish to take professional indemnity insurance do not have to visit insurers’ offices nor do they need to make phone calls to get details of professional indemnity insurance coverage provided by each.  All that the professional has to do is log on to the internet and look for web sites which provide professional indemnity insurance online or sites which give comparative quotes for professional indemnity insurance coverage offered by different insurers.  From the comfort of his office or home, the professional can know the inclusions and exclusions of the policy, the insurance rates and can select the policy with the best terms.

It would be advisable for professionals to have adequate professional indemnity insurance coverage.  They then would not have to worry about clients filing lawsuits against them.  All they need to do is pay the premium on time and go about their work in a diligent manner.