Professional indemnity insurance, also known as professional liability insurance or errors and omissions insurance, is a type of business insurance policy that protects professionals and companies against claims of financial losses resulting from alleged or actual negligence during the fulfillment of a professional service. It covers the cost of compensating clients for loss or damage resulting from negligent services or advice provided by a business or an individual.

Here are some key points to know about professional indemnity insurance:

• It provides coverage when a client sues you over errors, oversights, or alleges negligence in your work even if you did nothing wrong.
• It is often considered an essential form of financial protection for most industries.
• It covers legal costs, including lawyer’s fees, court costs, settlements, judgments, and fines.
• It is usually offered on a claims-made basis, which means that the insurer will only cover claims that are brought against you during the term of your policy.
• It does not cover every risk your business could face, such as employee injuries, which are covered by workers compensation insurance.
• It is required by law for some professions, such as medical professionals who are required to carry medical malpractice insurance.

If you provide professional services to clients, professional indemnity insurance can help protect you from the financial consequences of a lawsuit resulting from alleged negligence in your work.