Who Needs Professional Indemnity Insurance

There are many types of insurance policies that business owners and professional service providers need to have. One of the most important, however, is professional indemnity insurance. This insurance is also known as errors & omissions insurance or professional liability insurance. This policy is meant to protect professionals who offer services or advice to the public. In case a client files a lawsuit claiming that they have been harmed or injured in one way or another after following the advice offered by a professional or consuming their services, the policy will protect the service provider.

Benefits Offered by Professional Indemnity Insurance

If a lawsuit is filed by an injured client, the full cost of defending the service provider or defendant from the claims made by the plaintiff is covered by the policy. In the event the defense is unsuccessful and the court awards a huge amount as compensation, the policy will pay the amount awarded.

Having professional indemnity insurance is an absolute necessity if you are service provider. After spending years going to school and building your career, a simple malpractice lawsuit can destroy you completely. This is because hundreds of thousands or millions of dollars may be awarded as compensation for damages. If you do not have professional liability insurance, you will have to use up your savings, sell your house, take out a huge bank loan or sell your valuables just to pay the cost of damages. You may also go bankrupt in the process. To avoid getting ruined by lawsuits, whether malicious or merited, you should buy professional indemnity insurance from a reputable broker or supplier.

Who Needs Professional Indemnity Insurance

Basically, anyone who offers services or advice to the public needs professional indemnity insurance. This includes lawyers, architects, engineers and medical professionals, such as nurses, doctors, physiotherapists, pharmacists and imaging professionals among others. If you run a business that offers services or advice to consumers, you definitely need professional indemnity insurance.

It is important to note that the policies offered by different insurers may have different types of exclusion clauses in their policies. Therefore, professional service providers have to spend a little bit of time reading the fine-print of different policies to ensure they purchase a policy that protects them sufficiently.

Other Names

It’s crucial to note that professional indemnity insurance or professional liability insurance is also known as medical malpractice insurance in the medical profession. Therefore, every doctor, nurse, physiotherapist, psychologist or radiologist needs to have medical malpractice insurance to protect them from lawsuits that may be filed by patients or their loved ones.

In the legal profession, this policy is known as legal malpractice insurance. Every lawyer, paralegal and legal researcher needs to have legal malpractice insurance policy. Accountants and trustees can also benefit greatly from this type of policy.


Every insurance policy has exclusion clauses. When it comes to professional malpractice, one exclusion clause that professionals should be aware of is criminal negligence. If the liabilities are arising from criminal negligence, the insurer will not offer any benefits.