Professional Indemnity Insurance Definition Uk

If you are alleged to have provided inadequate advice services or designs to a client professional indemnity insurance provides cover for the legal costs and expenses in defending the claim as well as compensation payable to your client to rectify the mistake.

Professional indemnity insurance definition uk. Professional indemnity pi insurance is a commercial policy designed to protect businesses in the event that a client deems work produced or professional advice provided as inadequate. Insurers will set your premiums for professional indemnity insurance based on factors such as. Professional liability insurance pli also called professional indemnity insurance pii but more commonly known as errors omissions e o in the us is a form of liability insurance which helps protect professional advice and service providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client and damages awarded in such a civil. Professional indemnity insurance definition.

It can cover legal fees and compensation payments with the compensation often taking into account the financial loss that the client has suffered. Also known as professional liability insurance or errors and omissions insurance e o this cover is designed to protect you if a customer alleges that you provided faulty or inadequate. What is professional indemnity insurance. A professional indemnity insurance certificate is a summary document that an insurance company may provide a policyholder on request which shows that adequate insurance has been taken out without disclosing the confidential policy document this might be needed to presented to a client or trade body as evidence that the organisation in question is fully compliant with the relevant professional.

Nature of the work you do. Professional indemnity insurance is a type of liability insurance designed to protect businesses and individuals who provide advice or expertise to third parties. Indemnity cover or professional liability insurance will prevent you from suffering a financial loss when defending or settling the claim. Size and type of business.

Bigger businesses generally have more at stake when it comes to financial and reputational losses so you ll generally need higher levels of cover if your client is a big company. Professional indemnity insurance isn t a legal requirement for all businesses but some professional bodies and regulators will insist on a minimal level of cover. Is professional indemnity insurance mandatory. Those working in accounting architecture town planning surveying and law will often be required to take out insurance.

If your business faces high levels of risk then insurers are. Professional indemnity insurance is an important type of business insurance especially for businesses that give advice or provide a professional service to clients it can cover compensation claims if a business is sued by a client for making a mistake that leads to financial loss.