What is Professional Indemnity Insurance: An Overview

Have you ever wondered “what is professional indemnity insurance” and what professional indemnity insurance covers? Professional Indemnity Insurance is a type of business insurance that provides coverage for professionals who provide advice or services to clients. It protects professionals from financial losses if a client alleges negligence, errors or omissions, or breach of professional duty resulting in damage or loss.

Professional Indemnity Insurance covers our clients for a 3rd party claim made against them, as a direct result of their own negligence. The PI cover that we offer to our attorney clients is a Top-up cover, over and above the cover that they receive from the Attorneys Insurance Indemnity Fund.

The Attorneys Indemnity fund is the fund that all attorneys are part of as a result of their registration as attorney firms, and the fact that they are attorneys. This fund grants the attorneys PI cover of anything between R1.562 million and R3 125 million Rand depending on the number of Directors the firm has. As mentioned our PI cover is the top-up cover over and above this.

Liquidators do not have the luxury of Professional Indemnity Insurance protection from a fund like the Attorneys Indemnity Fund, and thus in their case, the Professional Indemnity Insurance cover that we sell, will kick in immediately after they have paid the mandatory excess.

Who Needs Professional Indemnity Insurance?

PI Cover is essential for professionals to manage the inherent risks of their work. As a result of the position you find yourself in, you need to take adequate steps to protect against the consequences of these risks.

The world in which professionals operate is one of ever-increasing pressure, and it is this pressure that can lead to errors and omissions. It is these errors and omissions of course which lead to claims arising against the practice. In our increasingly litigious society, and coupled with the high pressures the profession demands, it is imperative that law firms look to insurance companies for top-up cover.

PI Cover protects professionals and their clients by providing financial compensation for damages and legal expenses that may arise as a result of such errors or omissions. It offers peace of mind and ensures that professionals can fulfil their obligations without risking their assets or reputation.

What Does Professional Indemnity Insurance Cover?

Professional Indemnity Insurance covers a wide range of risks, including professional negligence, errors or omissions, breach of professional duty, negligent misrepresentation, defamation, intellectual property infringement, and more. It provides financial protection against claims made by clients or third parties arising from the professional’s actions or advice.

Contact Shackleton Risk for PI Insurance

Professional Indemnity Insurance cover provides the professional and the client with peace of mind and financial protection. In these trying financial times, very few firms can afford to be without it, so we recommend you contact us to receive a competitive quotation for your firm within 48 hours.  

For an in-depth look at how we can protect your profession, reach out to Shackleton Risk Management today. Learn what is professional indemnity insurance and how it can benefit you!