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.