Another type of insurance a business should take a look at is professional indemnity insurance. This type of coverage is especially useful for any businesses that provide advice to their customers. Occupations such as a consultant, accounting or financial service, information technology, legal, and medical all fall in this category. Of those named occupations, legal and medical are required to purchase professional indemnity insurance by some countries – making them involuntary. The rest of the listed occupations fall under voluntary coverage – it isn’t legally required, but it is suggested.

Now that we have a basic idea of who needs professional indemnity insurance, let’s take a look at the coverage itself. Professional indemnity insurance protects your business against claims for loss or damage by a client (or a third party) if you make a mistake or are found negligent in a service you provide for them. In addition, this type of coverage will cover legal costs.

There are three basic types of professional indemnity coverage. The first protects the policy holder against loss or circumstances caused by negligence, error, or omission in their business. This sort of policy is the most basic and offers the most limited coverage. The second coverage protects the policy holder against any loss from breach of duty for any reason. The final type of coverage is a blanket protecting the insured against any civil liability, i.e. breach of contract.

We introduced a smattering of occupations that should consider professional indemnity insurance in the opening paragraph. There are more that should investigate this coverage, including: architects, mortgage intermediaries, insurance brokers, financial advisors, consultants, advertising agencies, and public relation agencies. It is up to the individual to investigate whether or not professional indemnity insurance is compulsory for his/her business. It is also the individual’s responsibility to find the policy that best fits his/her situation and pocketbook.