Professional Indemnity Insurance (PII)

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Professional Indemnity also known as Professional Liability Insurance helps to protect your professional advice and service. It defends you against a negligence claim made by a client, and damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by you.

For example, if your client believes you’ve given them bad advice, not delivered what you said you would, or been careless with their confidential information, they can sue you for their losses caused by the alleged failure. If so, professional Indemnity Insurance will cover the costs of defending you, and any damages awarded to your client – up to the level of cover provided by your policy.

Although the insurance only cover genuine mistakes, insurers tend to draw the line at paying claims caused by recklessness or promising something you can’t deliver.

Areas covered:
  • Professional negligence (i.e. making a mistake in a piece of work for a client)
  • Loss of documents or data
  • Unintentional breach of copyright and/or confidentiality
  • Defamation and libel
  • Loss of goods or money (your own or for which you are responsible)

Professional liability insurance is required by law in some areas for certain kinds of professional practice, especially medical and legal.

Some Real life Situations:
  • Marketing company missed a digit on client’s telephone number on the advertisement they were designing for him, this resulted in failure of the marketing campaign, client sued the Marketing Company.
  • Client sued the mechanical engineer whose design had a defect, which caused a failure of the mechanism.
  • Online health and beauty Services Company sued their competitors for copying their business model and website.
  • Company sued an Electrical Safety Officer, when the electrical device burst to fire, which previously was approved as safe by him.

If you consider of getting a Professional Indemnity Insurance and need an advice, please do not hesitate to contact us.

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