What is a professional indemnity insurance?

Professional indemnity insurance, also known as errors and omissions (E&O) insurance, is essential for professionals who provide services, advice, or expertise. It protects against claims of negligence, mistakes, or breaches of duty that may result in financial loss for clients. Without this coverage, businesses and individuals risk costly legal battles and reputational damage.

Who Needs Professional Indemnity Insurance?

Any professional who offers advice or services can benefit from this type of insurance. It is particularly crucial for:

• Consultants – Protection from claims due to inaccurate recommendations or business strategies.

• Lawyers and Legal Advisors – Coverage for errors in legal documentation or case handling.

• Accountants and Financial Advisors – Safeguards against miscalculations or financial misguidance.

• Doctors and Healthcare Professionals – Protection from medical malpractice claims.

• Architects and Engineers – Security against construction or design flaws.

• IT Professionals – Defense against software failures, security breaches, or project mismanagement.

In many industries, professional indemnity insurance is a legal requirement or a condition for obtaining industry certifications and licenses.

Why is Professional Indemnity Insurance Important?

Mistakes happen—even the most experienced professionals can face claims of negligence or breach of contract. This insurance provides:

✔ Legal defense coverage – Pays for legal representation and court costs. ✔ Compensation for damages – Covers settlement fees or compensation owed to clients. ✔ Reputation protection – Helps maintain credibility and trust in your profession. ✔ Financial security – Shields businesses from potentially devastating claims.

What Does Professional Indemnity Insurance Cover?

Most policies include protection for:

✔ Errors and omissions in professional services ✔ Breach of contract or professional duty ✔ Defamation, libel, and slander claims ✔ Intellectual property infringement ✔ Loss of confidential client data

It does not typically cover intentional misconduct, fraudulent activities, or general business liability.

How to Choose the Right Policy

When selecting professional indemnity insurance, consider:

• Coverage Limits – Ensure the policy provides sufficient financial protection.

• Industry-Specific Risks – Choose a policy that aligns with the unique risks of your profession.

• Claims-Made Basis – Most policies require coverage to be active both when the alleged incident occurred and when the claim is filed.

• Retroactive Coverage – Some policies cover past services before the policy start date.

Get the Best Coverage at the Lowest Price

Protecting your business starts with choosing the right insurance partner. At Toby Hansen Agency, we compare nearly 100 carriers to find you the best coverage at the lowest price. With 30 years of industry experience, we ensure you receive the protection you need at a price you can afford.

Request your free quote today!