What is professional indemnity insurance?
Definition of professional indemnity insurance
Professional indemnity insurance is a type of insurance policy designed to protect businesses if their customers claim that their products or services are inadequate.
Any business that provides a professional service, offers advice or designs products could be sued by a customer if they are unhappy with the outcome of the work. Professional indemnity insurance is designed to cover the associated costs of settling any disputes, including legal fees and compensation.
What does professional indemnity insurance protect businesses from?
Different insurance providers offer different levels of cover in terms of costs and scenarios. Some typical scenarios covered by professional indemnity insurance include:
- Professional negligence
- Loss of data, for example, misplacing sensitive information about a client
- Allegations that you’ve given poor business advice
- Intellectual property theft