If you are working as a consultant and earn living by offering your skilled advices to individuals and companies in exchange of a fee, professional indemnity insurance policy is must for you.
For example, you have been hired to provide advices on a matter. While working on the task, you commit an error capable enough to cause a loss of millions of dollar to the client’s business. May be anyone of your staff member is responsible for the leakage of confidential data or the expenditure have crossed the set limit or you have changed the final outline of the plan without having a word with the client – in such conditions, you can be dragged to a court and ask to pay for damages.
Professional indemnity insurance indemnifies professionals against any third-party claim made by clients in case when they are dissatisfied with the provided service. In many cases, professional indemnity policies pay for the out-of-court settlement between the professional to protect the former’s reputation which is always at stake.