Which indemnity insurance

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All insurance products are governed by the terms in the applicable insurance policy, and all related decisions such as approval for coverage, premiums, commissions and fees and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Indemnity is an agreement between two parties in which one party is responsible for compensating another for damages or losses they may incur.

Indemnity insurance protects a policyholder from indemnity claims in exchange for monthly or annual premiums. Indemnity clauses are present in insurance contracts and business contracts, but indemnity insurance is something separate. You need indemnity insurance if you have agreed to indemnify another party and you want coverage for potential lawsuits that could arise from personal negligence.

Indemnification is the act of compensating another party after a loss has occurred. In an indemnity contract, the indemnitee is protected from liability and the indemnitor holds the indemnitee harmless.

For example, if a physician works for a hospital, they might be required to sign an indemnity agreement that holds the hospital harmless.

Therefore, the physician may require malpractice insurance — which is a form of indemnity insurance — to protect themself from potential patient lawsuits. When you sign up for an auto insurance policy , you are the indemnitee and your insurance company is the indemnitor.

A car insurance company may cover a policyholder in the following ways:. In terms of auto coverage, indemnity insurance from an auto insurance company is required in most states, excluding New Hampshire and Virginia. However, outside of state-required levels of liability , maintaining a full coverage policy can help avoid the financial burden of paying for vehicle damage out of pocket. Accidental death coverage, also known as double indemnity insurance, is a rider often available for life insurance plans.

Typically, policies provide this payout in addition to the death benefit. Professions that may need PI cover include consultants , IT professionals , teachers and private tutors , recruitment professionals , designers , fitness professionals and dance teachers.

Choosing a professional indemnity insurance limit depends on your firm's circumstances. If you need PI insurance for a specific contract, it's likely the client will have specified a minimum amount. This is often the case for industry bodies too, so check before arranging cover. Otherwise, consider a worst case scenario if you were to make a mistake in a piece of work for a client, and estimate the cost of putting it right. Remember to take into consideration any legal fees and losses that could be incurred by your client as a result of the error.

Find out more about PI insurance or call us on We are professional indemnity insurance experts and will be happy to talk you through the cover options available. Insurance FAQs. Insurance guides. COVID help and guidance.

Legal tips. Marketing tips. It is strongly advised that you enable JavaScript before proceeding. Click here to find out how to enable JavaScript in your browser. Professional indemnity insurance covers the cost of compensating clients for loss or damage resulting from negligent services or advice provided by a business or an individual.

Some professions are required to have professional indemnity insurance by their professional bodies or regulators — these include:. Professional indemnity insurance protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered.

Compensation claims can be brought against you even if you provided a service or offered advice for free. Professional indemnity cover is usually offered on a claims-made basis.