What is Professional Liability Policy or Professional Indemnity Insurance Coverage and Exemptions?

 

What is Professional Indemnity Insurance

Professional Indemnity (PI) insurance is an important form of protection for businesses that offer specialized services or professional advice. Designed to respond to losses against your business as a result of actual or alleged negligent actions or deficiencies in providing your professional service or advice. It also helps with legal costs related to responding to or managing claims under a PI insurance policy.

Professional Indemnity claims can arise from simple things like giving incorrect advice, miscalculation, misdiagnosis, or treatment.

Eligibility Criteria:

Public liability insurance policy is for professionals such as:

Management consultants, Chartered Accountants, Financial Accountants, Solicitors, Counsels, Lawyers, Advocates, Interior Decorators, Engineers, Architects, Doctors, other medical practitioners, Medical establishments

Factors affecting the cost of professional liability insurance

There are several factors involved in determining the amount of professional indemnity. To help you better understand, here are some factors that can affect the price of professional liability insurance:

• Type of business
• Policy coverage
• Retroactive period of the policy
• Risk factor of the business
• Location of the business
• Age of the business
• The yearly turnover of the business
• Size of the business/ company in terms of the number of employees or clients
• The credit score of the business
• Claims history

Coverage:

Professional Liability Insurance Policy covers all the legal liabilities arising out of negligence, omissions, or errors of any professional whilst rendering service that causes damage to the property of a third party or injury to the third party itself.

Expenses Incurred for Defence:

Public Liability Insurance also covers all the expenses incurred for defence. This means, all the charges and fees applicable to your defence in the court, is paid off out of your sum insured.

General Exceptions to the Professional Liability Insurance Policy:

Although public liability insurance is packed with various benefits, features and additions; However, it has some general exceptions. They are:

• If you’re under the influence of alcohol or drugs whilst rendering the services.
• Any criminal activity, violation of law, and fraud
• Any situation that is caused by or associated with AIDS.
• Nuclear perils and any war activities
• The financial loss you bear is like a loss of goodwill or market.
• Deliberate or willful non-compliance with the statutory regulations.
• Infringement of trademark, registered design, patent, trade name, plans, copyright.
• Legal liabilities that arise out of any personal injury like wrongful eviction, defamation, libel, wrongful detention, slander, false arrest, etc.

Conclusion

Professional Indemnity Insurance protects you from any legal action or threats, and you may be pressured by a client who has suffered a great loss due to your mistakes or misguided advice. It also saves you from having to pay large sums of money as compensation for customer losses. This policy protects your professional image by storing it between the public and existing and potential customers. Having this policy helps you keep your business and manage your risks while leaving room for improvement by pursuing advice and services. Get professional compensation or liability insurance and protect your business and yourself from the embarrassment of failure due to a significant amount of losses to your customers.