Professional Indemnity Insurance is a type of business insurance, typically for organizations that provide consultation or any professional services to its clients. Professional indemnity insurance covers claims made by the businesses in case their clients have sued them for making them endure any significant financial loss due to their advices and services.

Professional indemnity insurance works to protect businesses and individuals who provide consultation and services with the compensation for full and hefty costs arising from the loss that they have caused to their client. The coverage provided by the insurance company focuses on the alleged failure of the service delivery by the company, which has led to the financial loss due to errors and omissions in the service or consultation.

The insurance company handles the confidential data of its clients and their intellectual property to analyse before it provides consultation and required services. Keeping in mind the confidentiality of such information, it becomes very important for a business to take up professional indemnity insurance or professional liability insurance.

Some companies seek business with consultation and service providers demand that the individuals or businesses need to be covered by professional indemnity insurance. This is in order to lower the risk of not getting compensated for the losses caused by the business during the tenure of their service. Some individuals or organizations that need to have such insurance are accountants, financial advisors, health care professionals, solicitors, architects, chartered surveyors, etc.

Most organizations decide to take up professional indemnity insurance keeping in mind their own protection against coughing up a large sum of money, in case they have caused their clients a huge loss due to their own mistakes and have to compensate for that amount. It does not matter if you share a good business relationship or bond with your clients. A mistake that may lead to a financial loss will disrupt the peace between you. Therefore, it is very important to take up professional indemnity insurance for protection.