As its name suggests, professional indemnity insurance is a kind of insurance policy that protects professionals from any ‘third party claim.’ A professional who is engaged in any kind of professional service is subject to ‘professional indemnity claims.’ While serving to clients, professionals sometimes may commit error, omission and negligence that may turn out to be a disaster for their careers. Hence, having professional indemnity insurance policy may protect these experts when they are accused of a professional negligence. At any point of time, they can be dragged to a court and ask to pay for the loss occurred.
The insurance protects professionals when they are covered under a policy not when the claim is made. So, think over it carefully if you have any plans to cease or wind off your operations as anyone can make a claim against you.
Professional indemnity insurance is an effective tool that protects your professional interests in times when you are facing a major financial as well as professional crunch.