Professional Indemnity Insurance

How does it work?

Professional Indemnity Insurance covers the business and its employees. It also usually extends to cover consultants employed or acting on behalf of the firm and is compulsory in some professions e.g. solicitors.

Professional Indemnity Insurance provides protection against:

• potential claims of breach of professional duty against the business or an individual representing the business
• some broader policies state that they cover "civil liability". Other narrower policies are said to be "negligence" policies specifying that the policy responds to claims arising from negligent act error or omission
• legal costs incurred in defending a claim as described above.

Depending on the scope of cover, other elements of professional risk are covered, either automatically, or as extensions to the policy. These include:

• libel & slander
• liability for loss of documents
• breach of confidentiality
• breach of copyright (unintentional breach)
• liability arising from dishonesty of employees
• breach of warranty of authority.