Professional Indemnity
Professionals can protect themselves from financial losses due to mistakes or acts of negligence by purchasing professional indemnity (PI) insurance policies.
Professionals who provide a service to others generally should get this to protect their business and personal assets. Such professionals include lawyers, doctors, chiropractors, accountants, financial advisors, etc.
There are several types of PI policies available that are tailored to different professionals but provide similar benefits, including legal defense aid, claims payout assistance and extending coverage to protect employees.
However, not having PI policies leaves professionals in danger of losing their personal assets as well as their businesses to lawsuits. Professional indemnity insurance policies cover mistakes, errors and omissions committed by the insured’s, while they are providing services, which result in harm being done to third parties. These acts also include professionals giving financial and legal advice and recommendations.
There are several types of insurance policies that are considered PI plans. These plans include:
- Professional Liability
- Malpractice and Errors
- Omissions (E&O)
Malpractice insurance policies typically cover doctors and lawyers, protecting them from financial responsibility for damages they cause to their patients and clients. Professional liability and E&O policies protect professionals working in other fields.
Professional indemnity insurance policies provide several benefits for the insured
When claims are brought against the professionals, the insurers become liable for any damages caused to third parties. All award amounts won in or settled out of court are paid for by the insurance companies up to the policy’s coverage limit. However, the insurers also conduct investigations into claims made against the insured’s to filter out frivolous and unjustified lawsuits. PI policies also cover the insured’s legal costs while in litigation.
There are several factors that insurers consider when determining premium pricing for Professional Indemnity policies. Such factors include:
- Professional’s business location
- Coverage amounts
- Claims history
- Work industry
- Copy of a recently dated (three months) utility bill : Verification of your work address
- Photocopy of Identification Card
- Certificate Of Practice
- Documents of incorporation Certified by Registrar
- Annual Returns or list of Directors and Shareholders, Management Accountant or audited/unaudited financial statements (Pass 3 years and)
- Any previous claims documents
- Corporate Resolution authorizing the transaction
- Copy of a recently dated (three months) utility bill : Verification of your work address
- Photocopies of Identification Card (all parties under the policy)
- Certificates Of Practice (all parties under the policy)
- Documents of incorporation Certified by Registrar
- Annual Returns or list of Directors and Shareholders, Management Accountant or audited/unaudited financial statements (Pass 3 years and)
- Financial Statement(all parties under the policy)
- Any previous claims documents (all parties under the policy)
- Corporate Resolution authorizing the transaction
- List of Shareholders/Beneficial Owners if different from the Annual Returns