Professional indemnity insurance

For whom is professional indemnity insurance useful?

Professional liability insurance is particularly useful if you provide advice or if the progress of large projects depends on your input. Professional liability insurance is also useful if you are self-employed.

Example

Suppose you are a tax advisor and you make a mistake in a tax return calculation. Or you are an IT professional and because of your mistake it takes months for a website to go live. In that case, your customer can hold you liable for the financial damage they have suffered as a result. The professional indemnity insurance insures you against the costs that you then have to pay.

Is professional indemnity insurance mandatory?

Professional indemnity insurance is only required by law for financial advisors, lawyers, civil-law notaries, accountants, and architects.

In addition, there are various professional and business organisations that require insurance. More ofetn, clients or intermediaries demand that entrepreneurs take out their own indemnity insurance before they start working for them. Governments also usually require professional indemnity insurance for awarding contracts.

What is usually covered by professional indemnity insurance?

• (financial) damage as a result of a professional error
• loss of documents in your control
• costs of legal defence in the event of unjustified claims

What is usually not insured?

• Damage to property or people. You need business liability insurance for this.
• Costs you incur to redo your work.
• Damage caused by intent and recklessness.
• Damage caused by crimes, such as fraud and theft.

What is the difference between professional indemnity and business liability?

Professional indemnity is about the consequences of errors in your work or the work of your employees. Business liability involves any damage or personal injury you or your employees, company, products or services cause to others. Read more about business liability insurance.