Professional indemnity insurance, also known as professional negligence insurance but more widely known as professional indemnity insurance in the UK, is a type of professional liability insurance that helps to protect professional drivers, editors and publishers against claims made by other people or businesses. This type of insurance is very similar in concept to auto liability cover. It is intended to provide protection against claims made against professional drivers, publishers and editors who cause damage to others. Claims made under this cover are covered for both negligence and intentional damage. Professional indemnity insurance will not pay you to avoid court awards as they will only cover you for damages that have been awarded by a court.
In the UK, professional liability insurance can be claimed by any person against any person who has caused damage, sickness or injury to him or her. When you apply for professional indemnity insurance, you should state the exact circumstances under which you were injured, the amount of damage done, and the name and contact details of all complainants. The premiums of professional indemnity insurance will be based on the rating of your car or vehicle. The more expensive your car or vehicle, the higher will be your premiums. The amount of coverage will be decided by the company that provides the policy.
There are two main ways of making claims under the policy, namely breach of contract and breach of warranty. Under breach of contract, claims can be made if you breach any part of a written contract with a client for any professional service you give. These include claims for breach of information technology, data, or legal advice. If you breach a warranty, it can also be grounds for making a claim. These warranties usually protect you from losses caused by your professional indemnity insurance.
Sometimes clients choose not to purchase the full policy, and opt for the liability coverage instead. Liability coverage comes in handy in case your services cause damage to another party’s property. For example, if your lawn mowing business causes damage to a neighbor’s shrub, the neighbor sues you. Under these circumstances, professional indemnity insurance protects you from being sued. If the company you employed wants to sue you, the insurance coverage kicks in to cover the damages.
When choosing your policy, you have three choices: A primary contract, a specific indemnity policy, or an aggregate limit policy. A primary contract has a limited time frame in which you can make a claim, and the coverage is exclusive. In general, most polices provide coverage for one year. The specific indemnity policy, often called a limited obligation policy, gives you options to choose the level of coverage you need.
Aggregate limit policies, however, limit the number of claims you can make in a year. For instance, you can elect to make only one claim, or two claims, or twenty-one claims, or even more. If your professional indemnity insurance company ever rejects your request for a single claim, you may have to file a new claim to include damage from subsequent events that caused the first claim. For example, if you accidentally hit a car in November, but it was hit again in February because it rained the day before, you would have a breach in claim because of the subsequent damage.
Many professionals find professional indemnity insurance as an important part of protecting their reputations and incomes. It is especially important for lawyers, architects, accountants, and other professionals who rely on their reputation in order to earn a living. Even highly respected professionals who work only part time can quickly lose clients if they are subjected to negative stories in the media or by angry customers. Some businesses that offer professional advice may also benefit from having professional indemnity insurance. Financial advisors, for instance, rely on their reputation in helping people develop financial plans to protect their assets.
The financial loss caused by claims against a business can quickly wipe out any profits. Even small businesses can incur significant losses due to a data breach or a third party claiming they have a right to take legal action against the business. For small businesses that have staff with access to confidential information or customer information, a professional indemnity insurance policy can be an effective way of controlling expenses. Claims against small businesses can also affect the long term viability of those businesses. For example, a data breach could lead to the immediate closing of the business, causing great hardship to the staff and their families.