Professional Indemnity Insurance

Professional indemnity insurance is concerned with providing you with cover to protect you against the risks involved in doing your job. If you are pursued by a third party which claim that as a result of your professional negligence they have suffered a monetary loss your professional indemnity policy will cover you.

Professional indemnity insurance is also known as PI, which is simply an abbreviation of the insurance cover.

There are many instances which may lead to a claim being filled against you, it could be anything from providing incorrect advice, to calculating wrong measurements on architectural blue prints. If a claim is filled against you your insurance provider will pay the cost of compensation to the claimant.

Under your policy you may have an excess which means that you will be liable to pay this amount in the event of a claim. For example if your excess if £500 and you have a claim for £10,500 you will have to pay £500 towards the claim and the insurer will pay the remaining £10,000. This is essentially the same thing as most people have on their car or home insurance policy.

Optional Extensions
As an extension of your standard cover you could also protect yourself in the event that you take an action on behalf of your client, in good faith, that ultimately leads to a loss. If the third party then decides to pursue you for their losses under some professional indemnity insurance policies you will not be covered. With Liability for breach of warranty cover you could protect your business against such claims.

Claims
Professional indemnity insurance is designed to cover businesses in the event that they are pursued by a third parties who claims that they have suffered a loss as a result of their professionals negligence.