Let us say that a doctor is sued for misdiagnosis. Professional indemnity cover provides compensation against any legal fees or compensation.
Professional indemnity insurance is a type of insurance plan that provides coverage to professionals (those who offer professional services or advice) such as engineers, doctors, lawyers, accountants, consultants, architects, etc. It protects them from any client-related legal issues or if the client accuses the policyholder of negligence, breach of duty, errors, or omissions.
According to media reports, a union of more than 15,000 pharmacists across the country has asked the Insurance Regulatory and Development Authority of India to include them in the list of professionals who are eligible for professional indemnity insurance.
What It Covers
“Such a plan covers legal defense costs, pays for the settlement costs (subject to policy terms) and even investigates the claim made by the client in case of a professional’s mistake or negligence, thereby helping protect the professional’s finances and reputation,” says Santosh Sahoo, vice president, SME Insurance at Probus.
So essentially, the policy covers the insured against any damages to a third party in respect of any errors or omissions in the process of rendering professional services. It covers any sum that has been claimed against the insured during the policy period.
