protective professional indemnity insurance (2024)

FAQs

What is a reasonable level of professional indemnity insurance? ›

Minimum limit of indemnity

Based only on our experience, we recommend the following as a minimum guide: Sole Trader - Insure for at least four times fee income (£ 250,000 minimum) Limited Company - Insure for at least three times fee income (£ 500,000 minimum)

Protective professional indemnity insurance is first-party insurance that provides supplemental coverage for professional errors and omissions (E&O) claims against the insured's design professionals.

Professional indemnity insurance protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered. Compensation claims can be brought against you even if you provided a service or offered advice for free.

The amount of PI cover your business needs will depend on the nature of your work and the type of clients you service. If you work with large organisations in heavily regulated industries, then your professional indemnity requirements are likely to be higher.

The Limit of Indemnity (LOI) is the maximum amount the insurer will pay under a policy during the policy period. Legal costs may be included within the Limit of Indemnity or may be covered as an additional amount, depending on the policy purchased.

Is Hospital Indemnity Insurance Worth It? Like many supplemental insurance plans, hospital indemnity insurance is typically lower in cost, depending on the plan and coverage. Affordable hospital indemnity plans are worth considering if your existing health insurance plan has limits on hospitalization coverage.

Typical P&I cover includes: a carrier's third-party risks for damage caused to cargo during carriage; war risks; and risks of environmental damage such as oil spills and pollution.

Typical examples of indemnity insurance include professional insurance policies like malpractice insurance and errors and omissions insurance (E&O). These special insurance policies indemnify or reimburse professionals against claims made as they conduct their business.

This type of insurance responds to claims of negligence, oversights, malpractice, or errors your clients allege you committed while providing your services. If a client, or a former client, thinks that your bad advice caused them financial or reputational damage, they may choose to sue you.

What is an example of professional indemnity? ›

For example, if a client disputes work you have undertaken for them – perhaps it could be financial advice given by an accountant leading to the customer suffering financial loss – Professional Indemnity Insurance can cover the cost of defending the claim.

Professional indemnity cover is usually a priority if:

Your line of work can lead to disputes over quality, vision or copyright – for instance, if you are a graphic designer or architect. Your work leaves you exposed to claims of professional negligence.

The normal perfusion index (PI) ranges from 0.02% to 20%. If the perfusion index is at or below 0.4% showing weak pulse strength, then the oximeter reading can be unreliable. Peripheral artery diseases, diabetes, obesity, blood clots, etc. are the reasons for poor perfusion.

You can usually choose between £50,000 and £5 million of professional indemnity insurance. Your regulator, professional body or client contracts may tell you the minimum amount you need. Think too about the scope of your projects and the potential compensation demand if something went wrong.

PI is a parameter which is calculated as the ratio (AC/DC × 100) of pulsatile arterial blood flow (AC) to non-pulsatile (static) blood flow (DC) in peripheral tissues measured by pulse oximeter. It gives values from 0.02 to 20. Its normal average value is 1.4.

Typical examples of indemnity insurance include professional insurance policies like malpractice insurance and errors and omissions insurance (E&O). These special insurance policies indemnify or reimburse professionals against claims made as they conduct their business.

Level of cover

Professional indemnity insurance policies also vary in the level of coverage. For small and medium workplaces, it may vary from $1-20 million. Based on who you work with and what your industry is, you may need a higher level of cover.

In most states, these tools include the “reasonable expectations doctrine.” This doctrine states that the policyholder's reasonable expectations regarding the nature, terms, and scope of the coverage should be honored, even in cases when a careful review of the policy language would negate that expectation.

The intention of the excess is, in part, to give the policyholder a financial stake in minimising the risk of a claim occurring with the financial cost being a reason to avoid the situation happening.