Professional liability insurance, also called Professional Indemnity Insurance, protects professional practitioners such as Architects, quantity surveyors,

home inspectors, Lawyers, physicians, and Accountants against potential negligence claims made by their patients/clients. This coverage focuses on the failure to perform, financial loss and error or omission of the products or services sold. Additional coverage for breach of warranty, intellectual property, personal injury, security and cost of contract can be added. The primary reason for professional liability coverage is that a typical general liability insurance policy will only respond to a bodily injury, property damage, personal injury or advertising injury claim. But professional services and products can cause claims without causing a bodily injury, property damage, personal injury or advertising injury. Common reasons alleged in making claims on these policies are negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. Professional liability insurance may take on different forms and names depending on the profession. For example, in reference to medical professions it is called malpractice insurance, while errors and omissions (E&O) insurance is used

by consultants, brokers and lawyers. Other professions that commonly purchase professional liability insurance include accounting and financial services,construction and maintenance (general contractors, plumbers, etc., many of whom are also surety bonded), and transport. Some charities and other nonprofits/NGOs are also professional-liability insured. Business owners purchase professional indemnity (PI) insurance policies to protect themselves and their companies from financial liability in case of claims of negligence. PI plans also provide financial assistance to the insureds as they fight lawsuits brought against them in court. Professionals who work in different industries can choose several types of PI plans to protect their businesses. 1. Benefits
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Professionals transfer their liability to the insurance company when they purchase PI policies. When a lawsuit is brought against an insured professional, the insurance covers the legal fees, which can cost thousands of dollars. Insurers also conduct their own investigation into the claims made against their clients. If the insureds are found liable in a court case, the insurers pay the award amounts up to the policy's coverage limit. The PI policy also covers the actions of the insured's employees and staff members.

Types
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Several types of insurance plans are considered PI policies, including errors and omissions, malpractice and professional liability policies. These types of policies are purchased mainly by professionals such as doctors, lawyers, accountants and architects. These policies cover mistakes and acts of negligence committed by the insured while performing services that cause damages to a third party.

Considerations
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A professional applying for PI insurance is granted or denied coverage by an insurer based on several factors, including business locations, claims history, industry and coverage amount. The premium amounts reflect the degree of risk determined by these factors. If a professional is granted a policy but poses a higher risk than standard applicants, his premiums will be raised by the insurance company.

Time Frame
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Liability does not end for a professional once he retires or closes his business. Since PI plans only pay claims when they are in effect, a professional is left unprotected if a third party decides to sue him years later. To prevent this scenario, the insured can add "run-off"' coverage to his PI policy. Run off coverage provides protections for a period after the insured shuts down his business.

Warning
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Without an indemnity insurance plan, the professional takes a tremendous risk that jeopardizes his business and personal belongings. For example, a professional without a PI policy would be responsible for the full award amount won in court plus the legal fees. This can cost a professional millions of dollars and can essentially drive him to bankruptcy with insurance protection.

Professional indemnity insurance is a policy that protects the policy owner from financial loss

due to mistakes or negligent acts of the insured that causes a loss to a party. There are many types of policies that are considered a professional indemnity policy. While many professions can purchase this policy to protect their business, some companies are required to carry a professional indemnity policy by law. 1. Types of Insurance
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There are several types of insurance policies that can be considered a professional liability. Such policies include errors and omissions, malpractice and professional liability insurance. Professional indemnity insurance policies are bought by businesses that provide clients with advice, recommendations and service. These professionals include doctors, lawyers, accountants, financial advisors, chiropractors and web designers.

Benefits of Insurance
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By purchasing professional indemnity insurance, the policy owner transfers the responsibility of paying for any claims caused by the insured to the insurance company. When a claim is brought against the policy owner, the insurer will conduct their own investigation to rule out any that could be considered frivolous and unjustified. Also, the legal costs of the policy are covered under a professional indemnity insurance policy. This policy also covers claims made against employees, staff members and contractors and vendors who are conducting business on behalf of the covered company.

Coverage and Premiums

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Insurance companies consider several factors when determining the amount of premiums to charge an applicant such as business types, the industry it operates in, and the claim history of both. The coverage amount is a very important factor for the policy owner to consider as they will be responsible for paying any amount from a claim that exceeds the policy limit.

Limitations of Insurance
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There are three claims that professional indemnity insurance policies cover: negligent act, error or omission, breach of duty and civil liability. If the professional is found liable, they may have to pay the legal costs of the offended party. Also unless contractual limitations have been agreed upon

with the offended party, the professional's liability can remain unrestricted over a long period of time. Warnings
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Without a professional liability insurance policy, companies will be liable for paying any damages awarded in a lawsuit. They will also have to pay for their own legal costs to fight a lawsuit and even if they were to win, it could cost them thousands of dollars. For businesses operating in certain professions, such as the medical and financial industry, it may be a requirement in some states to be covered by an indemnity policy.

A policy that professionals can buy to protect themselves and their businesses from financial losses is a professional indemnity insurance policy. Professional indemnity policies provide several benefits for the policy holder including legal assistance and claims coverage. There are different types of professional indemnity policies available for professionals in various industries. These policies cover acts committed by the professionals that cause harm or damage to third parties. 1. Why Purchase a Professional Indemnity Insurance Policy
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Purchasing a professional indemnity insurance policy transfers the liability from the applicant to the insurance company. Professional indemnity policies pay for the professionals' legal costs as well as any judgment levied against them up to the coverage limit. Insurers also aid in the defense by conducting their own investigation into any claims made against the insured.

Types of Policies and What They Cover

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Policies that can be purchased by professionals to protect their business and personal assets include error and omissions, professional liability and medical malpractice insurance plans. Professionals who purchase these types of policies include accountants, financial advisers, doctors, lawyers and web designers. Professional indemnity policies cover acts of negligence, mistakes or errors made by the insured. The difference among the three policies is that malpractice insurance is geared toward lawyers and doctors while errors and omissions and professional liability insurance plans cover professionals in

other fields. Employees and staff of the professionals are also covered under a professional indemnity policy. Considerations
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Insurers consider several factors when determining whether to issue professional indemnity policies. Such factors include the professional's claim history, business location, coverage amount and work industry. If the professional is accepted but is considered a high risk, the insurance company will charge higher premiums. Also, before the insurer pays claims, the professional must satisfy a deductible.

Liability Doesn't Expire

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One reason for professionals to purchase professional indemnity policies is that liability never expires and they can be sued years after they are out of business. To protect them in such a case, professionals can add "run-off" coverage to their professional indemnity policies. Run-off coverage protects the insureds for a period of time after they close their businesses.

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eHow.com http://www.ehow.com/about_7319258_professional-indemnity-insurancecover_.html#ixzz1dO4sSV4R Explanation of Professional Indemnity Insurance

Professional indemnity insurance provides coverage for acts of negligence taken by a business or professional association. The word indemnity literally means "payment" from one party to another to compensate for a loss. It implies the individual paying has somehow caused loss to the payee, usually through negligence. Any business owner, even an independent contractor, should consider his or her exposures to negligence. In considering this exposure, they may realize professional indemnity insurance is a wise idea. Key Terms and Definitions To understand any insurance policy, it is necessary to understand the industry lingo.

The most important term in indemnity claims is "negligence." Negligence can be charged when any party does not act to correct a problem if negative consequences could have been foreseen by a reasonable individual. For example, failing to replace a broken stair in a staircase could be considered negligence.

The premium paid to an insurance policy is the charge a policy holder pays on a term by term basis. This premium is given in exchange for a guarantee of payment in the case a claim does occur.

A deductible is the amount a policy holder agrees to pay, either on a claim or on a policy, before asking the insurance company to begin making payments.

The limit, either per occurrence or per policy, is the most an insurance company will agree to pay.

Professional Indemnity Insurance Example With professional indemnity insurance, a business owner pays a premium in exchange for coverage of business negligence claims. For example, if you own a bike rental shop, you may rent out a bike that has a flat tire. The user of that bike is involved in an accident, and the user blames your negligence at having not fixed the flat tire for the accident. That individual wants to charge you for medical bills as a result of the accident. Your indemnity insurance is charged for the claim because you have paid your premiums. Finding Professional Indemnity Insurance Any business insurer will be able to connect you with professional indemnity insurance. Even if you have a home business, you may consider adding an indemnity line to your rental or home insurance policy. This will protect you personally from any lawsuit that occurs because of an action taken by or on behalf of your business. If you feel you have a substantial risk level for negligence claims, you may consider using a broker to find the best possible indemnity insurance at a good price. Cost and Benefits of Professional Indemnity Insurance The cost of insurance is somewhat subjective because it is directly correlated to your risk factors. Your risk factors include past claims, the nature of your business, and the degree to which you appear negligent or responsible. To maintain your insurance, you will have to pay a premium monthly, and this premium can go up if you have a claim. The key benefit to this type of insurance is evident when your business is sued for a large amount of money due to

negligence. Your professional indemnity insurance may be the only thing protecting you from bankruptcy.

Liability insurance Professional indemnity insurance If you are in the business of selling your knowledge or skills, you may want to consider taking out professional indemnity (PI) insurance. What you will be covered for PI insurance protects your business against claims for loss or damage made by a client or third party if you make mistakes or are found to have been negligent in some or all of the services you provided. PI insurance will also cover legal costs. Many professions are required to have PI insurance cover as a regulatory requirement or as part of their professional authorisation. This includes solicitors, accountants, architects, mortgage intermediaries, insurance brokers and financial advisers. Many consultants, advertising and PR agencies, and designers also choose to have this type of insurance. Ensure you are properly covered One important aspect to bear in mind when considering PI insurance is that cover is usually on a claims-made basis. This means that the policy will only cover claims that are made while the policy is 'live'. So, if you plan to cancel your policy when you close your business or retire, you may need to arrange 'run-off' cover for a period of time afterwards. Also, if you plan to change insurers, you will either need to arrange run-off cover or get agreement from your new insurer to accept new claims for previous incidents. Keep everything well documented One way to minimise such claims is to make sure projects are well documented. Ensure that you set out specific responsibilities in your contracts with clients beforehand and deal with complaints promptly.

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There are two types of products Commodities and services. When we purchase a commodity normally there is a guarantee that in case product do not contain promised quality or quantity the customer can take actions against the commodity provider let it be manufacturer or the retailer. Now, services, which are usually provided by some qualified professionals. We hire services expecting benefits from them. And when we are not offered the expected benefit we can take required action again the service provider. Qualified professional provides several kinds of services which generally are beneficial for the customer. But just like commodities services may also cause loss to the customer and in that situation service provider is liable for the loss suffered by the customer since customer has paid him for the services. Individuals or companies engaged in consultancy or providing services often come across legal disputes arising because of loss suffered to client due to faulty services, in such case professional Indemnity Insurance comes in handy to provide relief. What is Professional Indemnity Insurance? In cases when a professional fails to offer benefits and the customer suffers any loss because of the services provided the professional is liable for the loss. Thus there is Professional indemnity insurance available to cover this kind of cases. When the customer claims against the service Provider Company or individual the company may use Professional liability insurance. General insurance policies do not cover this kind of situation but professional liability insurance also known as errors and omission has made it possible. Applied Area: Professional indemnity Insurance is used by the professional where the risk of loss to the customer is high. Most commonly medical professional area the one who use this as medicines taken can have a severe affect on patient. Suffering from the prescribed medicines patient have right to claim against the physician. Professionals practicing law who provide opinions and advices may also need this insurance. Sometimes real state brokers, individuals providing consulting services use the professional indemnity insurance.

Condition when the insurance works: Professional indemnity insurance works only when there is a claim made against the policy holder by any of his client and within specified time. It should be noticed that this policy do not cover those claims made before the actual policy started or the cases occurred before. Any criminal prosecution is not covered under the policy. Advantages of Professional indemnity Insurance: There comes a time when services you offer might make your client suffer losses and it may lead to legal dispute which ultimately will lead to compensation for the loss suffered by the client. There is an insurance which may cover this condition and you will not need to make the compensation but the insurance company will do. Professional indemnity insurance is highly beneficial for professionals engaged in consultancy services. Lapse of Policy: Your policy may lapse and will stop providing you coverage against the claims made if you fail to renew the policy. Professional Indemnity Insurance: Beneficial?

Some professionals let it be Doctors, C.As, individuals practicing medical or law, lawyers are required to take professional indemnity insurance in order to have their professional interest protected. Sometimes in their career things may go wrong and due to their mistake or negligence their client may suffer losses. In such Condition professional indemnity insurance quote comes in handy. This insurance will cover and protect them against all the claims which fall under the category. One of the biggest advantages of using this insurance is that most of the cases which need to be settled in court are made up with the help of this insurance.

Professional indemnity insurance is a special type of insurance where policy holders (usually professionals) are indemnified from the suit filed against them due to their mistake or negligence which has caused the person making suit severe loss. What makes it extremely beneficial?

The insurance comes with different categories so one may be able to choose it according to requirement. Every individual has different needs so for the fulfillment of those needs different types of insurance policies are required.

With the advancement of technology now it is easier to have the documentations filled up.

Professional liability insurance provides coverage against verity of cases thus it is extremely beneficial for service providers.

It is not just compensation amount that is covered under the insurance but legal charges are also the responsibility of insurance company.

Coverage Area:

Where any client of the policy holder has suffered physical damage or injury or even death due to error or negligence of the professional duty within the policy period then it is the liability of the insurance company.

All the legal cost is paid by the insurance company as it falls under the professional indemnity insurance quote. These expenses include expenses made during investigation and other defense expense.

Excluded Areas: Areas covered under professional indemnity insurance are definite and limited. Following cases are not covered within this insurance:

Criminal acts or suits and claims made in criminal cases are not covered under this insurance.

Only professional liabilities of the insured persons are covered under the policy and not any third party claims.

HIV cases are not covered. Loss suffered to any client of indemnifies person preceding the insurance period.

Loss suffered due to intangible assets like goodwill is generally not covered under this insurance.

Intentional or mistake done in order to deceive someone and other fraudulent case do not fall under the criteria.

Indemnity insurance means an insurance to provide assurance that in happening of some uncertain events indemnifier will indemnify the indemnified person. In case of professional indemnified insurance the indemnifier is insurance company the indemnified person is the policy holder means any professional and those uncertain cases are where because of negligence or mistakes of any professional or due to omission in their services someone normally their client suffers loss. Taking professional indemnity insurance a person engaged in professional services is protected against the future risk. Professional Indemnity Insurance: Scope and Procedure

Errors made by the professionals sometimes prove really burdensome and troublesome in their career. In order to protect them from the mistakes an insurance known as profession indemnity insurance works well. It protects them against the law suit for compensation in case their services have caused loss or damage to any person. Key Features

This kind of insurance covers the liability of professional which occur due to omission or mistakes made by them.

Just like other insurance policies professional indemnity insurance quote can be renewed thus it is extremely beneficial for professionals like Chartered Accountant, doctors and lawyers.

Some insurance companies offer professional liability insurance not just for a single company or person but for a group of people or companies. Benefits of using such policies their availability with some definite relief.

Scope of Insurance:

When a person takes professional indemnity insurance he is free from any damage cause to the third party because of his/her negligence in services and such case will be tackled by the insurance company.

Point should be noticed that criminal suits are not covered under this insurance. Only civil cases falls under the area covered.

All the defense expenses are also covered under this insurance. It means insured person will not be liable to pay the legal charges such as investigation cost.

Professionals who can use: Professional indemnity insurance is for people offering services as doctors, brokers and lawyers. Following professionals can take this insurance:

Individuals practicing medical like physicians, nurses and doctors. Engineers Individuals practicing law Charter accountants and lawyers

Professional Indemnity Insurance VS normal Insurance PIL or professional indemnity insurance saves the professional interest of persons like doctors, architectures, lawyers and persons engaged in law and medical practices. Basic difference between a normal insurance policy and this is type of conditions covered. A normal policy will only cover those cases where someone is physically injured or loss of property is done. But professional indemnity insurance will have you covered in situations where you may have to settle the case in law court. Your professional indemnity insurance can be highly beneficial for you if youre engaged in service industry and providing services to your clients. There are numerous services providers sometimes its companies and often some individual professional takeprofessional indemnity insurance quote. This insurance is special because of the areas it covers. It can protect you if there is any mistake done by your side and anyone has suffered losses. To err is human it is well said and in our career several times we commit mistakes. It will affect us but when our mistakes cause damage to a third person than we are liable to compensate. Often because of mistakes done by doctors, physicians, lawyers a person will have to suffer

loss. Suffered person may sue you for that. For such conditions there is professional indemnity insurance which protects our interest. It covers all the cost of loss suffered by the person and also takes care of the legal charges.

Professional indemnity insurance protects you from claims of your clients, customers or business associates, arising out of their dissatisfaction from your service, which might be a result of professional advice, your action or the lack of it. A claim from an unhappy client is not only damaging to ones reputation, it can cost you a fortune. Professional indemnity insurance protects your business from both. When choosing professional indemnity insurance, it is important to consult an experienced and reliable broker, who can help you decide the amount of coverage that will be best for your company. The premiums charged by insurance companies depend on the nature of your business and the companys own experience in the sector. The risk factor of committing an error in your business is also of utmost importance. What does Professional Indemnity Insurance give you a cover for? Negligence or breach of duty: indemnifies the insured against any claims arising out of neglect, omission or error committed during the term of the policy.

rights and the damage caused thereby is given cash cover by your insurance company.

contract, slander or libel.

st, stolen or missing data. Getting insurance cover means that you do not have to pay for the damages.

committed by your company or any of your employees is given a cash cover by your insurance policy. How will Professional Indemnity Insurance protect your business? Professional indemnity insurance gives you coverage irrespective of whether the claim is genuine or not. Depending on the cover for which your business is insured, you are given professional, legal and monetary help, even if you lose. Further, the policy takes the financial responsibility of ensuring that any damage is repaired, thereby avoiding an even larger claim by the offended party. It is also a good idea to get professional indemnity insurance because clients will be more likely to conduct business with you if you have this insurance. All the expenses, ranging from that of solicitors, advocates, witnesses as well as the court cost of the offended party (if ordered by the court), will be paid for by your insurance company.

Professional Indemnity Insurance For Accounting - A Risk That Needs to Be Covered Given the complex nature of tax laws and accounting & corporate practices in all nations today, professional indemnity insurance for accounting professionals is gradually becoming a must. Keeping this requirement in mind, several insurance firms have formulated cutting edge professional indemnity insurance cover for accounting professionals and financial planning firms. In fact if one peruses any of the companies' lists of claims that are covered by accounting insurance coverage, one realizes that there are a vast variety of claims that the accounting profession needs a buffer against. For instance a business makes a sizable investment based on the balance sheet made by an accountant or his firm, only to find further down the line that the figures are erroneous. The disgruntled businessman who sees his money lost is quite capable of filing for damages from the accountancy firm, his claim being that it was based on their balance sheet that he took the decision to invest. The accountant is then considered liable according to his professional actions. It is in such a probable scenario that professional indemnity insurance kicks in for the beleaguered accountant. One must always keep in mind that a professional liability lawsuit

just does not involve staggering legal costs; it also damages reputations and credibility, sometimes irrevocably. With the professional indemnity cover in his insurance portfolio the accounting professional knows that the risks of his profession have been factored in. He knows that his claims will be dealt with competently and promptly, keeping his best interests in mind. Broad coverage is beneficial to the accounting professional today. The areas which his policy should cover are legal fees and claim costs, loss of documents, fraud and dishonesty, cost of official inquiries, previous business, outgoing principals and sometimes even vicarious liabilities which covers advice provided by other professionals to referred clients. All of this is covered under the broad spectrum of errors, omissions and malpractices. These insurance policies are available to firms of all sizes, from solo owner proprietorship firms to large partnership practices. In fact some companies even offer a 'Disabled Partner Replacement Coverage'. All these precautionary moves might seem like over the top to a layman, but for a professional who has invested a quarter of his life qualifying himself and another decade or more to establish his business, its money well spent. Risk management is essential. In fact there are insurance firms that not only provide professional indemnity insurance to accounting professionals but also a number of adding on services that add value to their product providing for a more satisfied customer. Ranging from free legal counsel from qualified experts offering pre claim assistance, advice relating to issues about accounting practices and procedures, to document review and engagement letter wording. It is a comprehensive and all inclusive package, and any accounting professional will be smart enough to recognize a safety package that encapsulates all his risks, manages them and protects him.