Do I Need Professional Indemnity Insurance

A professional indemnity insurance policy is a financial product to compensate the insured (your business) in the undesirable event of damages accrued from a claim being made against the business due to contravention of duty within the policy period for neglect, error, or omissions. Still not sure? In its most basic form, this insurance policy covers your business for a loss that may arise from negligence caused by your business while carrying out such business. Professional indemnity insurance policies have a tendency to vary greatly in the amount of cover the policy provides.

There are a number of instances in which a business may have need to call upon their professional indemnity insurance policy. The first possibility is that a business provides a service to the purchaser, and due to a negligent act, a negligent omission, or other type of negligent error, carries out the work in a slipshod manner, which may lead to further issues arising down the road.

The same scenario could also apply to advice given by a business. Professional indemnity insurance also protects against allegations of the supply of false, or otherwise generally misleading information. The third most common situation that may require the use of a professional indemnity insurance would be the unknowing or otherwise accidental encroachment of the intellectual copyright of another, be it an individual, a business, or other organisation. Intellectual material is also considered property, and the same copyright laws protect it.



A professional indemnity insurance policy may have a variety of aspects of coverage, but there are also particular elements that for a number of reasons have been excluded from the policy. Often, the professional indemnity insurance policy will include protection against claims made against your business from a civil liability case, claims that have arisen from the loss of documents, or if documents have been damaged. Legal costs such as those that may arise in the defence case include, but are not limited to, the hiring and retaining of lawyers, the court costs, hiring of professional witnesses or experts of the industry, and so forth, may or may not be included dependant on your selected policy.

Other elements not covered will usually include elements pertaining to war and terrorism (including nuclear activity), pollution unless considered as a breach of duty of the business, potential claims known about when the policy was first purchased, and claims that should be covered under an additional policy, such as buildings, contents, or employers liability.

Any physical products (except possibly software and programming products used for the business that have been amended in some way) are not covered by professional indemnity insurance. The insurance policy will also not cover any fines and penalties, or claims from by an insurance company unless a judgment has been received declaring otherwise. Certain warranties set by your business may also affect the coverage provided by your professional indemnity insurance, such as a guarantee of outcome, whether express or implied.

So who may need to have a professional indemnity insurance policy? The most common industries where businesses shop for a professional indemnity insurance quote are those whereby a service is provided as opposed to a physical product. This includes businesses in the fields of accounting or other financial services, graphic design firms, marketing and internet marketing businesses, and surveyors, and management or consultancy businesses.

Other, more product based rather than service based, businesses, may be better with a shop insurance quote. It is always possible to get a shop insurance and professional indemnity insurance quote and compare the two to see which will provide your business with the most appropriate coverage. Bear in mind that it is very easy to shop for professional indemnity insurance online. It is recommended to get a few quotes for comparison, and ensure you select a policy that is comprehensive enough for your requirements. For example, some policies are more inclusive and will cover the bracket of 'any civil liability'.