Professional Liability Insurance
Professional liability insurance is sometimes known by the abbreviation PLI, professional indemnity insurance (PII) or errors & omissions (E&O). It is a form of insurance that protects professional advice and service companies from negligence claims made by their clients and any resulting damages awarded in civil lawsuits. Professional liability insurance focuses on the “alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder”.
Therefore, if you do offer advice and/or services in a professional capacity, it is vital to secure professional indemnity insurance. Should the worst scenario occur – i.e. a client raises a court case against you – professional indemnity insurance will provide you with peace of mind that the proceedings are covered from your side of the matter. When you are looking for professional indemnity insurance, it is vital to read the small print and establish exactly what you are and are not covered for (i.e. often, coverage does not include criminal prosecutions).
It’s also worth noting that professional indemnity insurance is required by law for many professional practices and that it is often required as part of a contact with another company (i.e. the recipients of the service or advice). A number of professional indemnity insurance plans are available and with a little research, you will find the best plan for you and your business. Don’t risk operating without professional indemnity insurance, should a client raise a complaint at a later date, you could incur substantial financial losses.
