The professional indemnity insurance checklist is helpful for professionals and businesses who plan to buy the cover. Let us discuss these points in detail to help professionals make informed decisions.

Professional Indemnity Insurance Statutory and Legal Requirements

• When you plan to buy a professional indemnity insurance policy, the first thing to check is whether there are any statutory or legal requirements linked to your profession. While PI insurance is not mandatory for all professions in India, many regulatory bodies strongly recommend it to ensure professional accountability and client protection.

• For example, professionals working in the healthcare sector are often required or encouraged by medical councils, hospitals, or employers to carry professional indemnity insurance to protect against claims arising from medical negligence or errors.

Professional Indemnity Insurance Sum Insured

• One of the things professionals need to check before buying the plan is the sum insured. The sum insured is the maximum amount the insurance provider will pay to cover the legal expenses, compensation, and settlements arising from a professional negligence claim.

• Choosing the right sum insured is important because an inadequate cover may leave you paying a large portion of the claim out of pocket. The sum insured should be selected based on factors such as the nature of your profession, the size of client contracts, annual turnover, and the potential financial impact of a claim.

Professional Indemnity Insurance Contract Risks or Inclusions

Another factor that helps choose the right PI plan is inclusion. Inclusions are the expenses and risks the policy covers. Knowing these helps you understand what kind of support you can expect if a claim is raised against you. Some of the common inclusions covered under the professional indemnity insurance are:

• Legal defence cost: The professional indemnity insurance covers the legal defence costs of the claims. This includes court fees, lawyer fees, investigation fees and more.

• Breach of duty: The plan also protects against claims arising from an actual or alleged failure to perform professional duties as expected.

• Loss of document: It also covers costs related to the loss, damage, or destruction of important client documents while in your care.

• Court attendance: The plan also reimburses expenses incurred when you are required to attend court as part of a professional negligence claim.

Professional Indemnity Insurance Exclusions

Knowing about the professional indemnity insurance exclusions is also equally important. These are the expenses or claims which the insurance providers do not cover. Some common exclusions are not covered under the plan.

• The PI insurance plan does not cover bodily injury or property damage claims.

• Any fraudulent, dishonest, or intentional claims are not covered under the plan.

• Any claim for an incorrect cost assessment by an insured will not be covered.

• Any claim arising due to defamation, including libel, slander, or false arrest, will not be covered under the policy.

• The plan does not cover harassment, discrimination, or similar situations.

Professional Indemnity Insurance Confidentiality Clause

• A professional who handles the sensitive data, client information, etc, the confidentiality clause helps them. The clause defines how the policy responds if a claim arises due to the unintentional disclosure or breach of confidential client information.

• A PI policy with confidentiality coverage helps protect you against claims related to accidental data leaks, loss of confidential documents, or unauthorised sharing of information during the course of your professional services.

• It is important to check the scope and limitations of this clause, as some policies may exclude deliberate acts or cyber-related breaches.

Professional Indemnity Insurance Terms and Conditions

• Another thing to check when buying a plan is its terms and conditions. The terms and conditions of a professional indemnity insurance policy explain how the coverage works, what is covered, and what is not. They also outline your responsibilities as a policyholder, such as timely claim reporting, maintaining proper records, and complying with professional standards.

• Before buying a PI policy, it is important to read the terms and conditions carefully. They may include conditions related to claim reporting timelines, retroactive date, policy limits, deductibles, and exclusions. Ignoring these details can lead to claim rejection later, even if the risk appears to be covered on the surface.

Professional Indemnity Insurance Claim Process

• The claim process is another crucial factor to consider when buying a professional indemnity insurance plan. Even the best coverage loses value if the claim process is complicated or slow.

• Always choose an insurer that offers a simple, transparent claim process with clear steps for intimation, documentation, and settlement. Additionally, you need to check customer support, turnaround time, etc., as they offer significant relief during stressful times.

Professional Indemnity Insurance Client’s Agreements or Obligations

• Client agreements and contractual obligations are key to professional indemnity insurance. Many claims arise not just from professional errors, but from failure to meet the terms agreed with a client.

• Before buying a PI policy, it is important to check whether the coverage extends to liabilities arising from client contracts. The key rule is to review your client agreements carefully and ensure they align with what your PI policy covers, so you do not face gaps in protection later.

With so many professional indemnity insurance options available, choosing the right plan can be a little tricky. To help with this, a professional indemnity insurance checklist has been introduced. Before buying a plan, review the checklist, then purchase one that meets your requirements.

TATA AIG offers a customised professional indemnity insurance plan based on your profession requirements. For instance, if you are an architect, our PI insurance plan covers risks such as design errors, incorrect project specifications, and professional negligence that may arise during your work.

Not just this, with our insurance policy, you will get features such as an extended reporting period, loss document coverage, and more. With the whole process digital, you can buy, renew, or file a PI insurance claim with a few taps on your phone. Secure yourself against various professional risks with our professional indemnity insurance plan.