Professional Indemnity
Professional Indemnity Insurance, also known as Professional Liability Insurance or Errors and Omissions Insurance (E&O), is a type of insurance coverage that protects professionals and their businesses from financial losses arising from claims of negligence, errors, omissions, or professional misconduct in the performance of their professional services.
Professional Indemnity Insurance is for professionals who provide advice, consultation or specialised services to clients. It includes professions such as doctors, lawyers, architects, engineers, consultants, accountants, real estate agents, and many others. The policy covers the legal costs like defence costs, court fees and settlement compensation for defending against claims and any damages awarded to the claimant.
Professional Indemnity (PI) Insurance is necessary for businesses or professions that offer services or advice. The cost of arising claims poses a risk to your business. This insurance gives protection against liabilities arising from potential damages and associated legal expenses incurred while defending against claims resulting from errors, omissions, or breaches of duty during their work.
Engineers, architects, accountants, lawyers, and real-estate consultants can take Professional Indemnity (PI) Insurance.
Lifecycle Fire and General can offer you Professional Indemnity (PI) Insurance plan that acts as coverage, ensuring the financial security and resilience of professionals and their businesses in the face of potential legal challenges.
Professional indemnity insurance is regarded as having been introduced by Lloyd’s in the 1920s.
In New Zealand, professional indemnity is compulsory for contractors who work in an organisation.
New Zealand is a leading market of Professional Indemnity insurance solutions, insuring over 10,000 policyholders annually.
The coverages provided by Professional Indemnity Insurance
- Professional Negligence: Coverage is for claims alleging professional negligence, errors, or omissions in the services or advice provided by the insured professional.
- Legal Defense Costs: The policy covers legal expenses, including attorney fees, court costs, expert witness fees, and other related expenses incurred in defending against a claim.
- Damages and Settlements: Professional Indemnity Insurance provides coverage for loss or settlements given to the claimant if the insured professional is liable for negligence or professional misconduct.
- Civil Liability: It covers claims resulting from alleged breaches of professional duty or professional misconduct that cause financial losses or harm to clients.
- Loss of Documents: Coverage for the loss or accidental damage of documents, records, or data entrusted to the insured professional.
- Retroactive Coverage: Professional Indemnity Insurance may include retroactive coverage, which covers claims arising from incidents before the policy begins, as long as the incidents were unknown while purchasing the policy.
The following are the benefits of Professional Indemnity Insurance. It covers
- Cover any legal fees.
- Cover compensation or damage expenses against clients.
- Any investigation cost.
- Cost of Lost or damaged documents of the insurer.
- Cost of any legal penalty from the court.
- Compensation claims arising from a breach of statutory obligation.
Professional Indemnity Insurance does not cover
- Liabilities arising from deliberate acts, fraud, or criminal misconduct committed by the insured professional.
- Claims or circumstances that the insurer knows before the policy commencement.
- Liabilities resulting from pure contractual disputes or breaches of contract.
- Physical damages to property or bodily injury claims.
- Fines, penalties, or punitive damages imposed by regulatory authorities or courts.
- Intellectual property infringement claims, such as copyright, trademark, or patent disputes, are typically excluded.
- Claims arising from acts, errors, or omissions that the insured knew about or should have known before the policy commencement.
Lifecycle Fire and General can help clients choose the best insurance policy based on risk assessment. We suggest appropriate Professional Indemnity Insurance coverage to the client according to his industry and current circumstances.
Professionals should carefully review the policy terms, conditions, exclusions, and any applicable endorsements to understand the specific limitations and coverage gaps of a Professional Indemnity Insurance policy.
Lifecycle Fire and General are insurance brokers. We ensure that the policy adequately addresses the risks and needs of the insured professional and their specific profession or industry.