Professional indemnity insurance or PI insurance as it is more commonly known is pretty much what the name suggests. PI insurance provides for cover in case claims are made for damages or losses incurred by the policy holder due to their own professional negligence. This type of insurance cover is usually taken by accountants, lawyers, brokers, and any other kind of professionals who offer consulting services or work in an advisory role.
Most often, professional indemnity insurance covers losses or circumstances incurred due to negligence act, negligent error or negligent omission committed by the policy holder in carrying out their business. However, some policies go further than the above norm and also cover losses incurred due to civil liabilities such as breach of contract.
Professional indemnity insurance is very beneficial to professionals such as doctors and lawyers since it gives them an insurance coverage during cases of lawsuits or claims that are filed against them because of professional negligence. Certain professions are even required to get this type of insurance for their own protection and advantage. Although paying a monthly or quarterly premium for professional indemnity insurance is quite expensive, it outweighs the cost since it gives you the peace of mind during cases of lawsuits. Especially for those with high-risk careers such as doctors, having this kind of insurance is truly beneficial since they may encounter a number of lawsuits throughout their careers.
Some insurance companies would only offer coverage for negligence, but there are others who cover for other areas such as libel, slander or breach of contract (see this page for more information). Other insurance companies provide coverage for other civil liabilities so it would be best to do a thorough research of the policies offered by a particular company to check the extent of the cover.
Professionals in the business of offering advice to individuals and corporations need to indemnify themselves from suits arising from their practices. An indemnity cover will protect the professional from suits arising from damages or losses incurred by their clients as a result of their advice or services offered.
In seeking to buy an insurance cover the professional will need to consider a number of issues such as whether he wants a standalone professional indemnity cover or he wants it as an all inclusive business cover. A professional seeking to have a professional indemnity insurance cover will more often require an insurance firm to send him a professional indemnity insurance quote.
The professional indemnity insurance quote will include the policy details and details about the premiums payable. This will enable the professional to assess the suitability of the cover. It is advisable to seek for quotations from a number of insurers. Quotations obtained by the professional from varies insurance firms will guide him in making the final decision. A decision based on facts after some consideration rather than an intuition based decision.