Professional indemnity insurance

Professional indemnity insurance provides cover for claims brought against the policyholder due to their professional negligence.

There are three types of Professional Indemnity wordings:

Negligent act, error or omission

This indemnifies the policyholder against loss/circumstances incurred only as a result of their negligent act, error or omission in carrying out the policyholders business. This is the narrowest form of cover

Breach of duty

A typical PI policy will provide indemnity to the insured against loss arising from any claim or claims for breach of duty which may be made and reported to the insurers during the policy period by reason of any neglect, error or omissions committed in the conduct of the insureds professional business.

Some policies are more tightly worded than others and whilst a number of policy wordings are designed to satisfy a stated minimum approved wording, which makes them easier to compare, others differ dramatically in the cover they provide.

Civil liability

Some PI policies go further than the standard cover and provide indemnity 'for any civil liability'. This covers such areas as breach of contract, libel and slander. (Some standard cover policies may also include libel and slander as extensions to the policy wordings if required.)

Because the operative clause of a 'civil liability' policy is so wide, there is normally a long list of exclusions in order to exclude liabilities that should be covered elsewhere - otherwise things like Employers Liability (EL) and Public Liability (PL) might be covered.

External links

* [ What is Professional Indemnity Insurance?]

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