Professional Indemnity Insurance Rates

A person belonging to a particular profession faces certain risks when rendering service. A professional needs to study professional indemnity insurance rates offered by different insurance companies and take insurance to protect himself against such risks.

Need for Professional Indemnity Insurance

A professional uses his skill in his job of providing service to the client.  He may be doing very well professionally and financially.  But at some time or the other, he would have made some mistake – an act of error or omission, a wrong judgment which would have caused injury or loss to the client.

 A doctor may make a mistake when diagnosing a patient’s illness.  A banker’s advice may result in a loss to the client.  An architect may make an error while drawing up the house plan.  Other professionals like stock brokers, chartered accountants, web designers may make a professional error which may result in a client suing them.
 If the client went to court and claimed damages from the professional, he would have to spend a lot, starting from legal fees to the actual compensation to be paid if an adverse judgment was passed.  Such claims involve huge money and would surely dent his finances, if the professional had to pay from his pocket.

What he needs to do is get comparative quotes of professional indemnity insurance rates of different insurance companies and take a rates immediately.  He would then be indemnified by the insurance company in case a claim is filed by a client.  This would save him from huge expense and maybe even possible bankruptcy.

Comparison of Professional Indemnity Insurance Rates

A professional who wants to buy professional indemnity insurance should first get professional indemnity insurance rates from different insurance companies.  He should also compare the covers they offer, the inclusions, exclusions and other terms.  He can individually get this information from each insurer or he can ask his insurance agent.  However, the most convenient form of comparing professional indemnity insurance rates today is by using the internet. 

Every insurer generally has a web site which contains information about the kinds of insurance they offer.  A professional interested in taking indemnity insurance can visit each site and collect information.  But a better method would be to visit a site which has tied up with various professional indemnity insurers.  Such a site would usually ask the professional for some basic data about himself, the kind of insurance he is looking for, the insurance amount, the coverage he wants and so on.  A table showing comparative professional indemnity insurance rates would then appear.  He can then study the terms of each and select the insurance company which offers the best rates.

Basis of Professional Indemnity Insurance Rates

  • The rates for professional indemnity insurance depend on the basis of the insurance cover.  For instance, a professional may want to take a rates based on ‘negligence’ where the insurance company is liable to pay only for a claim based on an act of negligence.  If the basis is ‘civil liability’, then the insurer is responsible for compensation to be paid to a member of the public for any injury caused.
  • Professional indemnity insurance rates will also depend on the profession of the insured.  Certain professions like medicine are considered to be more risky as the chances for claims are high.  So the insurance rates for doctors may be higher than that for other professions.
  • Insurance companies have their own policies for fixing rates.  So everything else remaining the same, the professional indemnity insurance rates of different companies may be different.
  • The extent of coverage and the amount of insurance desired by the insured will also decide the professional indemnity insurance rates.

A professional person may be very busy with his schedule, but it would be in his interest to take some time off to study professional indemnity insurance rates and buy the required insurance rates.